What is the credit check?

Typically, lenders, credit providers, or service providers require a credit check of your credit history when applying for a loan, credit or service that requires financial agreement with you. This is also used as a security check against fraud, arrears, and insolvency. Commonly, credit checks are required to open a bank account, loan or credit applications, service contracts such as (telephone, Internet, etc.), installment purchases and occasionally for property rental.

Report and credit history

Your credit history is created by companies, with which you have a financial agreement or contract. They report monthly to the credit reference agencies of your payment statements, regardless of whether your account is up to date or you have arrears, if so. If you have a mobile phone contract, for example, this telephone service rover will send your payment status to a credit reference agency.

Your credit history shows your financial commitments in the last 6 years. Shows where you lived and have lived in the past and if you are registered on the electoral register (electoral roll). It also shows with which companies you have or have had credit or payment obligations and how much you pay, how many arrears you have in the last 6 years, as well as the credit checks made by the companies when you requested a service, loan or credit in the last 6 -12 months regardless of whether it was approved or not.

Credit score

The credit history summary is your credit score, which indicates your credit rating with a number based on your last 6-year credit status. You can increase your score, for example, if you have a credit card and use it moderately, but you don't spend all the credit on it and pay it on time every month. You can also increase your points by registering at the electoral register and not requesting credit or loan often within 6 to 12 months.

How to verify your Credit Report

Each Credit Reference Agency is legally required to provide you with a copy of your credit report for £ 2. The main agencies are. You can also check your credit report online from £ 15 / month. The first month is usually free as a trial period. If you want you can cancel it anytime.

Payment Protection Insurance (PPI)

When you purchase a loan or a credit card, you will be offered payment protection insurance (PPI) that will cover the cost of your monthly reimbursements from your credit card or loan in case you have become unemployed or affected by an accident or illness. Your loan applications will not be affected by this.

Overdraft limit

If you already have a checking account, you can ask your bank for an overdraft limit; this allows you to borrow money up to an agreed amount. Overdraft limits generally start at £ 250 depending on your credit score. You can submit your application online, by phone or in person at your bank.

Personal Loans (Unsecured Loans)

As we know, personal loans are available at any bank or other lenders. They are not protected against any assets, for example, your home. In general, the amount you can request ranges from £ 1000 to £ 25000. The amount also depends on how much your monthly income is and your credit score. All lenders must be registered with the FCA - Financial Conduct Authority - Authority Financial Conduct.

Car finance

In general, you can request auto financing if:

• You have been living in the United Kingdom for at least 3 years
• When you are over 21 years of age
• When you have a British driver's license  
• You work full time and have a salary of at least £ 750 / month
• You have a bank account with a debit facility Direct (Direct Debit)  
• You are not bankrupt and have not had a court in the last 6 years 

You can request between £ 1000 and £ 75,000 this depends on your salary and your credit score. All lenders must be registered with the FCA - Financial Conduct Authority.

Logbook Loan

Registration book loans are when you temporarily need to give your vehicle and the registration book (logbook/vehicle registration document / V5C) your vehicle or vehicle registration document. You can submit your application online or in-person at car financing companies or money lenders. In general, you can borrow between £ 500 and £ 50,000, depending on how much your vehicle is worth or up to half the value of your car. You can lose your vehicle if you don't keep your agreement. All lenders must be registered with the FCA - Financial Conduct Authority.

Payday Loans

A payday loan is a high-interest loan that allows you to borrow money in the short term until your next payday or for a maximum of 12 monthly installments. In general, you can apply for £ 100- £ 1500. All lenders must be registered with the FCA - Financial Conduct Authority - Financial Conduct Authority. You will find many fraudulent companies and people out there looking to take advantage of people in difficult situations. Scam lenders will try to entice you many times with professional-sounding names, offering you quick cash over the phone and saying your credit history does not matter. Such types of outfits simply want to obtain your personal data only for their own uses.

The best-known payday loan companies online often provide the ideal solution to emergency circumstances. These companies allow customers to take a loan out against their next expected paycheck. The loan has to be paid back with interest once the person is paid. The loans do not generally require a credit check, and often customers can receive cash in one hour or less. The interest demanded upon payment of the loan is often higher than with a traditional loan, so these loan services should only be used in case of an emergency.

Pawnbrokers

You can pawn your valuables for cash at any pawn shop. It is also a high-interest loan. Clarify the terms and conditions of the operation before reaching an agreement. All lenders must be registered with the FCA - Financial Conduct Authority.