When you apply for credit – be it through a loan or a credit card – you will generally be subject to a credit check. The company you are applying to may well get a report from a credit reference agency, such as Experian or Equifax, which will provide details on your current and previous credit history.
There are, however, a number of myths around how these reports work. Here we debunk the five biggest:
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Credit reference agencies do not hold credit blacklists.
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Previous occupants of your home cannot affect your creditworthiness.
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Adverse information cannot be removed from your credit report for a fee by so-called ‘credit repair’ firms.
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Your credit report does not show when credit has been refused, only the fact that a lender looked at your information (with your permission) when you applied for credit.
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Negative information about you does not affect the rest of your household.
One factor that can affect your credit rating is a county court judgment (CCJ). This is when a county court makes a final decision regarding the payment of a sum of money from one party to another. If a CCJ is issued against you then it will show on your credit report.
Some people who have a CCJ think that their creditworthiness may be permanently impaired and may only ever consider applying for a bad credit loan. However, a CCJ is only kept on your credit report for six years, after which it is removed. In fact, if you pay the CCJ within a month of its issue, then it should be removed immediately.
If you apply for a loan with Direct Line, we use Experian to check your credit history. However, if you are concerned about your credit history, you can apply for your credit report from Experian free of charge through Direct Line. You can also have a free 30 day trial of CreditExpert, the credit monitoring and identity fraud protection service from Experian.
If your CCJ has expired then you can apply online for a loan with Direct Line.
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