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As a first step, prior to you read the article below, here is a range of helpful definitions. A default is the financial term to indicate where you've violated your contractual arrangements. When you have missed any payments on a mail orders, as an example, they might place a Notice of Default on to your credit report. This will have an adverse impact on your credit file down the road when you decide to get added credit. A 'CCJ' actually means County Court Judgement. This signifies a legal judgement from a County Court regarding someone who remains in debt to another party (another person or business) or a case where they have not met the stipulations of a credit arrangement. This judgement will establish a suitable repayment arrangement with the purpose that the person in debt will begin to cover what they have borrowed. County Court Judgement are a matter of public record and will influence the debtor's chance of being granted more credit for the following 72 months. Equifax is one of the chief credit referencing agencies in the UK. Equifax gathers all your credit information from a number of sources to create a file that reveals your credit history - i.e. your credit report. If you fill out an application for credit, lenders will check out your credit report to know about your financial history. It's possible to get a copy of your report at any point so that you can confirm that everything is right. The Equifax online site has a lot of constructive instructions on sensible credit choices and safeguarding yourself from scams. A Credit Score is something used by loan, mortgage and credit companies to decide whether you qualify for a particular product. A Credit Score looks at your current and past financial history, plus other personal details, and using mathematics, analyses what type of 'risk' you are. By 'risk' we mean whether it is likely you'll pay back the money borrowed; whether you can really afford the repayments etc. Factors that can affect your score include: 1. late or missed payments in the past 2. County Court Judgements and arrears 3. How much you currently owe - even if all your payments are up to date 4. You not being on the electoral roll 5. Applying for lots of new credit accounts - this is viewed that you are someone getting into financial trouble 6. The length of your credit history 7. Financial associations - other people listed on your credit file that have bad debts can affect your credit rating Why Your Score Matters Your Credit Scores matters because it is probably the most influential factor used by loan companies in deciding whether they will give you a loan/mortgage/other credit. However, it is the lender who makes the final decision and they may well take in to account reasons for past credit problems. Apart from checking out your financial history, they will also need to look at your occupation; whether you have any equity in your mortgage, your income and savings etc.
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