Credit Reporting and Credit Cards
In Great Britain three companies are responsible for recording all of your financial details that is then used by credit reference agencies to decide if you are worthy of any credit that you may apply for. The three established agencies are Equifax, CallCredit and Experian, the accuracy of their records may well be the deciding factor as to if you receive a positive response from a credit card company.
When you make an application for a new credit card or to increase your credit limit the card company will make enquiries with one or more of these credit reporting agencies. Once they have your information in hand they will calculate through a computer program what they think their risk is if they were to issue you with a credit card.
If the credit reporting agency gives you a glowing report, they will consider you as low-risk and automatically issue you with a credit card with a very attractive credit limit. If the reporting agency gives you a low credit score their credit card company may reject the application possibly require further information from your in order to make an assessment as to how much they are prepared to extend you in revolving credit on your card.
There are a multitude of reasons why you may receive a poor credit rating instead of a high score. The main reason is your previous record in making full and timely repayments on any previous loans of any kind.
Missing a monthly payment can seriously damage your credit score and generally, no amount of explanation of protest will adjust the reporting company’s figures. The reporting company will check up on every loan that you have ever had as well as every previous credit card payments they could even check if you were late with your utility bills at any point.
They will also make enquiries with local courts to see if you have been the subject of any recent county court judgements. Any of these items that shall any problems will definitely affect your ability to obtain a credit card.
Even if you do have no problems obtaining a new card your credit score will still directly affect the amount that the credit card company will be prepared to extend to you in revolving credit.
Therefore the better your credit record can be at the time of applying for a credit card the more likely you will receive a positive response. If you have had any previous problems that may affect your credit score it is best to attempt to clear them up before applying for a credit card. |
