Credit Report – Apply & Get Full Assessment

If you apply for a loan, or any form of credit for that matter, then the first thing your lender will look at is your credit score. This will help them to decide whether or not to accept your application.
The credit scoring system checks the”credit score” of everyone, regardless of their role or position, and gives the lender an idea of how responsible they are with their money and whether or not they’re likely to pay their lender back.
There is no such thing as a “credit blacklist”. Instead, each lender you apply to will carry out its own assessment to determine whether to offer you credit. However, having a poor credit history will make it more likely that you are turned down when you apply to borrow money, apply credit card, mobile phone contract or a mortgage.
It is never too late to repair your credit score and we are here to help every step of the way.

Credit Report Assessment and Potential Creditor

When you apply for a credit facility, such as a credit card or a loan, the first thing the creditor will do is to check out your credit report. Your credit report holds all of the necessary information about you and your financial history, including your current and previous addresses, what credit accounts you have open and whether you have had any issues with repaying debt in the past.

If you fail to stick to the terms of your original credit agreement, information about this will appear on your credit report. For example, making credit card or loan repayments late, or missing them altogether, will surely affect your ability to borrow in future. Likewise, being declared bankrupt, entering into an Individual Voluntary Arrangement (IVA) or having a County Court Judgement (CCJ) made against you will badly affect your credit worthiness. Even making just the minimum repayment on your credit card each month can have an adverse effect on your credit report, as it may lead lenders to assume you are struggling to clear your debts.
Lenders always aim to ensure they get back their money, and so to have a good chance of getting credit, your report needs to look good to prove that you can handle your loans and credit products responsibly.

Reasons of continuous poor credit report

There are a lot of worrying thoughts and misconceptions about creditors, what they may do and cannot do during your debt problems.

We hear from my clients that they are scared of debt recovery agents and Bailiff knocking on their doors.

Debt Problems can create a lot of other family problems.

Debt Problems must be dealt with in a timely manner

The rules around creditors sending court forms have changed. You should now receive a “letter of claim” before any court action. It is a new Pre-Action Protocol for debt claims.

Call our office on 0203 318 0990 for immediate debt advice.

The creditors will send you letters and call you as they need to collect their money from you once you have broken the terms of your signed agreement with them. It does not matter if your debt is from Halifax, Natwest, Lloyds, HSBC, Nationwide and Barclays.

Your debt is regulated under CC Act 1974 amended 2006 and it is unsecured, the creditor can use the below collection process.

what your creditors can & cannot do

It is important to know your rights to put you at ease from your Debt Problems

It is to be noted that the advice below on your debt problems is about what creditors can do with your unsecured debt. You may find more information on our debt management company website or write to me at debt@acmecredit.co.uk

 

What Debt Collector Can Do?

Your Creditors will certainly do the following soon

1. Your creditors can send you payment demand letters and can call you during day hours.

2. Your creditors or third party collection companies may send you local doorstep collectors, kindly note they are not bailiffs.

The doorstep collector has no power to enforce the debt and threaten you.

3. They can continue to add interest and charges to your account in line with the original agreement.

4.  As a customer, If you bank with the same creditor whom you owe money or your current account was used to draw funds to pay your credit card or loan payment even if you did not allow it.

Although the bank does not need permission from you it does need to warn you, this is called ‘Bank’s right of offset.’

Your Creditor will do the following in a few months

5. You will receive a default notice after missing 3-6 months of repayment on your credit commitment.

Missed repayment serves as a warning that your account is about to default.

A default notice will be granted if you don’t bring it up to date within two weeks.
It’ll appear on your credit file for six years and will make it harder to get credit for that time.

You must bring your repayment up to date if you do not want to receive a default notice on your credit report.

If you can’t afford to pay repayment on your credit card or loan accounts, please take immediate debt advice.
We strongly recommended that you should not use your second credit card to pay for your first one.

6. Your creditors do not want to spend their time and efforts chasing you for payment demand as it costs them to recover more, thus they may pass your debt amount to a debt collection company.
The debt collection company will act on the recommended enforcement action from the original creditor and will be consistent in their approach in contacting you.

7. Your creditor can apply for County court judgment (CCJ). If you receive them, kindly seek immediate help from a qualified debt advisor. If there is no response from you, you will likely receive ‘Judgement in Default’.

8. Your creditor can apply for CCJ and further can enforce the debt repayment via ‘Attachment of earnings’ or Charging order if you own your property and has equity in it.

Do not ignore the payment demand letter

Your creditor can also apply for a bankruptcy order if your debt is more than £5000.00 as single account debt. Although it is not common in the regulated debt collection process.
Please read our blog on CCJ and what you should do.

Please read our blog on CCJ and what you should do.

https://acmecredit.co.uk/country-court-judgement-and-county-court-claim/

What Creditors Can’t Do?

The creditor can’t call you at odd hours of the day, especially early morning or late evening.

They can’t put psychological pressure on you or harass you, they can only request you to pay while you are going through debt problems.

Debt collection process and guidelines under Financial Conduct Authority regulation – refer to below link.

Check out FCA debt collection guidelines

New GDPR rules explained

Your creditor can’t break data protection laws.

Your creditors can’t discuss your debt problems with your family members, friends or employer without your specific permission.

  • They cannot pretend to possess legal powers they don’t have, for example by making their letters look like court documents.
  • Your creditor cannot claim they can send bailiffs to your property without a court order.
  • They cannot add excessive amounts of interest or charges neither can they increase the rate of interest because you’ve missed payments.
  • They can’t add collection charges which are more than the costs to them. For Example, a creditor couldn’t add £100 for sending a letter to you which will have cost them much less than this.
  •  The creditor cannot chase you on social media and ask you publicly to pay the debt.
  •  Sometimes creditors may not be nice to speak to, but they can’t be threatening or abusive to you, and they can’t lie to you.

FCA Debt Collection Regulation

In practice and due to revised new debt collection regulation under the FCA regime, you’ll find many creditors are more reasonable than you might expect, especially if you explain your financial position and willingness to pay and let them know you’re getting help to try and sort it out.

Please call our office on 0203 318 0990 for further advice and help on court claims.
There is a range of solutions depending on whether you are salaried or self-employed or you are a director or shareholder of a limited company.

Should you enter into a debt solution with us, fees will apply.

IVA’s are formal solutions and failure to keep to the terms can result in your IVA failing and you could end up bankrupt.

Our office offers all types of debt solutions and we have a strategic partnership with Insolvency Practitioners for formal debt solutions.

Missed Payments and Credit History

Any late or missed payments, or payments below the required amount in your credit agreement, are recorded in your credit history. While late repayments won’t ruin your credit score, they raise concerns for creditors, impacting your credit application approvals.

Defaults and Their Impact

Consistently late repayments for three to six months may lead to a default notice from your creditor, signaling the need to repay debts. Defaults affect your creditworthiness, staying on your report for six years, influencing potential lenders’ decisions.

Formal Debt Solutions – Bankruptcy, VA and DRO

Bankruptcy, VA, and DRO
Debt solutions like an IVA, bankruptcy, or DRO reflect efforts to manage debts but can deter lenders. These listings lower your credit score for five to six years, even post-completion, affecting future credit opportunities.

Absence of Credit History

Lacking credit history affects your credit rating, making it advisable to start with small credit usage, like a credit card for routine expenses, showcasing responsible money management and enhancing your score.

Credit/Store Cards Usage Limits

Unused credit can worry lenders, prompting them to prefer canceled cards with high limits. Conversely, maxed-out limits necessitate prompt repayment to avoid financial complications and potential defaults.

Electoral Roll Registration

Being on the electoral roll confirms your address history and positively impacts your credit score. Registering to vote is crucial, with legal obligations and penalties for non-compliance or false information.

Credit Application Frequency

Frequent credit applications lower your score, highlighting the importance of strategic credit usage. Soft searches for certain products spare score reductions, emphasizing thoughtful credit utilization.

Joint Account Impact

Opening joint accounts links credit histories, impacting both parties’ scores. Overdrafts and debt liability should be managed cautiously to avoid financial strain and credit score declines.

Credit Types Preference

Non-mortgage credit is favored for score improvement due to lower risk. Regular repayments enhance scores over time, making informed financial decisions crucial for maintaining good credit standing.

Credit History Length

Long, positive credit histories are advantageous, demonstrating reliable credit management and reducing future risk perceptions. Patience and prudent financial choices bolster creditworthiness over time.

Credit Reference Agencies

There are three credit reference agencies in the UK. Here are contact details for each of the three main credit reference agencies:

EXPERIAN

EQUIFAX

TRANS UNION

Our recommendation: You should check your credit report and take steps to improve your credit rating before trying to borrow from another lender. Three credit referral agencies (Experian, Equifax and Call Credit) who hold your detailed information on your credit report. You may apply to them to get your credit report and check your report regularly to see any updates.

Frequently Asked Questions

There is a wide range of things that contribute to and affect your score, including:

  • Utility bills – Your payments to your water and gas and electric providers may be listed on your report.
  • Mortgages (Personal and BTL) – This is one of the biggest credit products to feature on your report and your payment history will be available for lenders to view.
  • Personal loans (Secured and Unsecured) – If you take on a loan, this will sit on your report and affect your score.
  • Credit cards – Your credit card repayment history will be viewable on your report.
  • Hire Purchase Agreements – If you take on a finance deal or a PCP loan with a car manufacturer, this will be listed.
  • Mobile phone contracts – Phone contracts are classed as credit deals and so the repayments you make will be listed.
  • Buy now pay later agreements – Any financial contract you take on will be listed, including repayment schemes.
If you are refused credit, you do not have a legal right to be explained “why”. If a rejection is based on information obtained from a credit reference agency, the creditor must simply tell the borrower that this is the case, and provide details of the agency concerned. They are not obliged to offer any further information. If you feel you have been turned down for credit unfairly, you can appeal and supply further information to support your application. Should you still find yourself unable to get the credit you originally applied for, it is important not to apply for another credit card or loan immediately as this could because you further problems. Instead, you should check your credit report and take steps to improve your credit rating before trying to borrow from another lender.

There are a number of things that will not affect your credit score, including:

  • age
  • ethnicity
  • salary
  • occupation and employment history
  • student loans
  • where you live
  • marital status
  • religion
  • whether you have children
  • Informal debt solution agreements between you and your creditors, but a default will.