Bad Credit? What It Really Means

Do you have bad credit?

How do you know?

What exactly does having bad credit mean?

Well in the normal course of events these questions are usually asked when someone has had an application for credit turned down by a lender or other financial institution. So you now want to know upon what basis they have turned you down for credit.

Did you know that the vast majority of your past financial history is recorded in a central place and made available to all lenders and financial institutions upon request? These reports, known as credit reports are held by credit reference agencies and record all your recent financial activities. If you want to know what’s on your credit report there is detailed article on this site.

Your Credit Report

In brief however the credit report contains details of your individual loans, creditcards, mortgages, and possibly even bank accounts, anywhere in fact where you may borrowed money from a financial institution. In addition, the credit report includes paymet histories, including whether you have been late or missed any payments.

In addition to any loans or other credit matter, the credit report also includes details of any County Court Judgments you may have had issued against you (those that you have not satisfied within the specified time limits, that is).

Now if you were about to lend someone some money wouldn’t you like to find out whether the person you were lending to had any history of not paying the lender back. Of course you would. Well the credit report, held and maintained by the credit reference agencies is the big lender and financial institutions way of doing exactly this check.

When you apply for credit the lender uses information from your credit application to obtain your credit report from one of the credit reference agencies. If there is any adverse information contained on that particular credit report then you may well be classified as having bad credit, or being a bad credit risk. This may well lead to your credit application being turned down; rejected.

Obviously you don’t want this. So what do you do about it? Well, the process is actually quite simple. Before you apply for new credit why not obtain a copy of your credit report from one of the credit reference agencies. By doing this you will be able to see what the lenders or financial institutions see (in fact you get to see somethings on your credit report that they do not get to see too). If there is any adverse information or data on your credit report then you can start the process of credit repair prior to making any application. Seems a sensible approach?

So how do you go about getting hold of your credit report?

The Free Credit Report

Well, the first, and probably most obvious way is to type in “free credit report” to the Google search engine. This will throw up hundreds, if not thousands of companies offering you the opportunity of getting hold of your credit report for free. This obviously sounds attractive, especially because if you do believe you may have bad credit then it is likely that money is something you do not have in abundance and getting something for free is always attractive.

Notwithstanding the free offer being attractive, as you may well expect the free credit report offers are not what they seem, so proceed with caution. What these companies want is for you to sign up for a subscription to there credit information service. These services are useful and the information provided may well be helpful to you, however they are not inexpensive. The free credit report offering is designed to snare you. In any event be careful and you should be OK. If they state they are offering you something for free, then even if you do find yourself providing payment details you will still be able to receive the credit report for free, just remember to cancel the payment details once you have received it or you may well find yourself forgetting and subsequently making payments for the continuation of the service.

Credit Reports And The Credit Reference Agencies

In addition the free credit report is not the only way of getting hold of your credit report. Actually the credit reference agencies have to, by law, provide you upon request with an up-to-date copy of your credit report. Indeed they are not actually allowed to charge you for sight of your own personal report, although they are allowed to charge you a handling fee. In the UK this handling fee is only £2. This is relatively inexpensive and the process does not involve you committing to anything else, just the one-off fee. To get hold of your credit report this way just write to the credit reference agencies enclosing a check for the appropriate fee.

Don’t Worry You Can Fix Bad Credit

Once you have your credit report you will then be able to determine whether you do indeed have bad credit, or a poor credit status. If you do then it would be advisable to commence the process of do it yourself credit repair. This process is not complex or difficult but does require you to be careful and exert some discipline which may well have been lacking previously. Do not worry, most circumstances of bad credit are perfectly repairable, just take it one step at a time.

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