When it comes to getting a car on finance, your credit score is really important. That’s why it’s always a good idea to check your credit before your start applying. When you check your credit report, you will get access to your previous borrowing history and some personal details. Many consumers may wonder what is recorded on your credit report and what lenders can see when they perform a credit check on you. The blog below looks at the information that is listed on your credit file and helps you understand how things like defaults and CCJs stay on your resort for.
What is a credit report?
Your credit report is essentially like a financial CV. It can show how you handle your credit and is a full breakdown of all of your borrowing history. Whether, that be loans, mortgages or credit cards, this kind of information will be listed on your credit file. Your credit report is really important and can affect your credit score. Factors such as missed payments, defaults, CCJs and lack of credit history can all affect your credit score and can be listed on your report. When it comes to car financing and credit scores, it can be harder to get approved when you have mishandled your credit in the past. When a lender performs a credit check on you, they will either be given a full look at your report or access to part of it depending on which type of credit check has been performed. A soft search credit check only allows the lender to see some of the information recorded on your credit file and won’t harm your current score either.
How to get a credit report?
There are a number of ways in which you can obtain a free credit report. Firstly, there’s not just one credit referencing agency instead, in the UK there are 3 main agencies which tend to be the most popular. Each has its own credit lending criteria and credit scale which can mean that what one sees as ‘bad credit’ may be fair or poor to another. Many consumers find it beneficial to check their credit scores and report with all three agencies to see how their information differed. If you do choose to do this, you should make sure all the information listed on each report is accurate and up to date as having misinformation on your credit report can negatively impact your score. The three main credit referencing agencies are Equifax, Experian and TransUnion.
Check your credit report for free:
- Experian – through the Experian website.
- Equifax – by using ClearScore.
- TransUnion – through Credit Karma.
Why has your credit score dropped?
What is recorded on your credit file?
There are many misconceptions about the factors that are and arent listed on your credit report. We look to bring you the truth and also highlight the things that won’t ever appear on your credit file.
✅ Information listed on your credit report:
- Address details include both your current address and any previous addresses.
- Any financial agreements, including car finance, loans, credit cards and mobile phone contracts.
- Repayment schedules and any missed or late repayments.
- Public records such as CCJs, defaults and bankruptcies.
- Financial connections with other people, e.g joint car finance or mortgages.
🚫 Information NOT listed on your credit file:
- Relationship status
- Buying habits or bank account statements
- Income and expenditure
- Bank account balance
- Criminal records
How long do missed payments stay on your credit file?
When you take out a finance or credit agreement, it’s really important that you can meet each and every payment til the end of your finance term. If you fail to do so, a late or missed payment marker will appear on your credit file. This can seriously affect your credit score and also limit your availability to get finance or loans in the future. Once you have missed a payment or made a late repayment, the marker on your credit report will stay there for 6 years. Find out more about affordability for car finance and why it’s so important.
How long do defaults stay on your credit report?
A default is when you break the rules of your credit agreement and fail to stick to the repayment schedule. usually, when you have missed a few car finance payments in a row or owe too much money that you can pay back, the lender will put the account into default and the lender cancels the agreement. You then become a debtor to the lender and the lender can then take further action to collect the debt. Similar to a missed payment, a default can also stay on your credit file for six years and also have a huge impact on your ability to get finance again. Find out more about getting car finance with a default.
CCJ’s and your credit report – how long do they stay on for?
A County Court Judgement (CCJ) is when a lender or debt service takes you to court when you owe them money that you have not paid back. Just like having a default or missed payment marker on your file, the CCJ will stay on your credit report for up to six years. However, once the debt has been paid back, this will be updated on your credit report. If you pay the CCJ within a month of the judgment, it can be possible to apply for the CCJ to be removed from your credit reports which helps increase your chances of getting approved for finance.
How long will bankruptcy be on your credit report for?
Bankruptcy stays on your credit file for six years and it can be pretty much impossible to find a lender who would offer you finance during this time. Bankruptcy is when a creditor takes legal action against you and your possessions are shared out amongst the companies you owe money to and you may also be asked to make payments towards your debt for up to three years. Bankruptcy should never be taken lightly and it can cause a lot of stress and financial issues. Find out more about how bankruptcy works and the ability to get finance in the future.
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