How a Lender Checks Your Credit Report
Your credit profile is crucial for any lender when you apply for a loan. It is like a tool for lenders, who refer to it to know about your credit history.
A credit report is maintained by various credit bureaus. It holds all the important data about your debts and the way you are managing them.
The lender will like to get his money back and that too on time. If your credit report lacks credibility, the lender will reject your loan application. Here is how a lender checks the credit report to know your credit worthiness.
• Other than your basic information like name and date of birth, the lender checks whether you are on the electoral register.
• Late payments on credits will leave a negative mark on your credit report. No lender likes to lend money to irresponsible borrowers, who fail to make the repayments on agreed terms. You will be seen as a defaulter.
• If you are paying just the minimum and carrying the balance most of the time, the lender will not like it. You will be seen as someone, who is unable to repay the debt in full.
• Opening multiple lines of credit in a short time will raise questions. It will be seen as if you are in a deep financial mess and trying to get money from all the available sources. Such behaviour will discourage lenders to consider your loan request.
• The lender also checks to see if you have co-signed for a loan for someone else. The debt will reflect in your report. If the person is unable to repay on time, that too will show up in your records and will impact the lender’s decision about your loan.
The lender also looks for any bankruptcy or County Court Judgments in your credit report, which also factors in assessing the risk in lending you money.
A credit report is maintained by various credit bureaus. It holds all the important data about your debts and the way you are managing them.
The lender will like to get his money back and that too on time. If your credit report lacks credibility, the lender will reject your loan application. Here is how a lender checks the credit report to know your credit worthiness.
• Other than your basic information like name and date of birth, the lender checks whether you are on the electoral register.
• Late payments on credits will leave a negative mark on your credit report. No lender likes to lend money to irresponsible borrowers, who fail to make the repayments on agreed terms. You will be seen as a defaulter.
• If you are paying just the minimum and carrying the balance most of the time, the lender will not like it. You will be seen as someone, who is unable to repay the debt in full.
• Opening multiple lines of credit in a short time will raise questions. It will be seen as if you are in a deep financial mess and trying to get money from all the available sources. Such behaviour will discourage lenders to consider your loan request.
• The lender also checks to see if you have co-signed for a loan for someone else. The debt will reflect in your report. If the person is unable to repay on time, that too will show up in your records and will impact the lender’s decision about your loan.
The lender also looks for any bankruptcy or County Court Judgments in your credit report, which also factors in assessing the risk in lending you money.
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