Adverse Credit
What is Credit History?
Credit History is a record of an individual's past borrowing and repaying, including information about late payments and bankruptcy. When a customer fills out an application for credit from a bank, store or credit card company, their information is forwarded to a credit bureau, along with constant updates on the status of their credit accounts, address or any other changes made since the last time they applied for any credit. This information is used by lenders such as credit card companies to determine an individual's or entity's credit worthiness; that is, determining an individual's means and willingness to repay an loans. This helps determine whether to extend credit, and on what terms.
How credit ratings are determined?
Credit ratings are determined differently in each country, but the factors are similar, and may include:
Payment record - a record of bills being overdue will lower the credit rating.
Control of debt - Lenders want to see that borrowers are not living beyond their means. Lenders estimate that non-mortgage credit payments each month should typically not exceed more than 15 percent of the borrower's after tax income.
Signs of responsibility and stability
Lenders prefer the borrower's to be in permanent employment for at least new year as a sign of stability. Having a respected profession can improve a credit rating.
What are Credit inquiries?
Credit inquiries - An inquiry is a notation on a credit history file. There are several kinds of notations that may or may not have an adverse effect on the credit score.
What are Credit Footprints?
'Footprints' are credit inquiries that leave a footprint on a persons credit file that are made by lenders. Credit Footprints inquiries from lenders directly affect the borrower's credit score. Keeping credit inquiries to a minimum can help a person's credit rating. A lender may perceive many inquiries on a person's report as a signal that the person is looking for loans and will possibly consider that person a poor credit risk. Stick to one broker and avoid shopping around too much as you could inadvertently negatively affect your credit score.
Adverse credit history, also called sub-prime credit history, non-status credit history, impaired credit history, poor credit history, and bad credit history, is a negative credit rating.
A negative credit rating is often considered undesirable to lenders and other extenders of credit for the purposes of loaning money or capital.
Consequences
Note that is not the credit reporting agencies that decide whether a credit history is "adverse." It is the individual lender or creditor which makes that decision, each lender has its own policy on what scores fall within their guidelines. The specific scores that fall within a lender's guidelines is most often NOT disclosed to the applicant due to its nature as a trade secret.
Speak to one of our adverse credit experts who have access to a sizeable lending panel who specialize in sourcing mortgages specifically for people with a poor credit history.
The overall cost for comparison is 9.2% APR. Actual rate available will depend upon your circumstances. Please ask for a personalised illustration . Rate correct as of 27/03/2008
At North Mortgages our Mortgage Experts will take care of everything on your behalf. Remember, we source mortgages from the whole of the market, so you know your getting the best deals available and all tailored to suit your personal circumstances.
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See also:
Why not visit our links page for information on credit checks and Credit Reference Agencies.
