Poor Credit Rating

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It is very important for a person to understand his/her credit rating. Credit Rating is such a thing that can determine your eligibility to get various types of loan that a person might want like a car loan, mortgage, secured loan, unsecured loan etc. But for this a person might know the elements and information that are related to the approval and rejection of the loan that is applied.

Here are some of the facts as well as information that a person should know about the credit rating. Some of them are:

What do you mean by Credit Rating?
Whenever a person applies for a loan he/she is rated on the various factors in the loan application and also the credit history. These will let the lender to determine whether the credit history is good and are they a good risk to provide the loan or not. The credit history includes things like recent application for credit, time period of credit, type of credit, the owed amount, and repayment and payment schedules etc. All these factors are considered by the lender in order to provide him the credit.

Your Financial History
Creditors are also interested in knowing the financial history of the person like if the person is being charged for County Court Judgement or bankruptcy against him/her, defaults against the loan, Are there any arrears on existing loan, number of credit application. Some of the other factors that also affect the approval are whether the person has a house or stays on rent, employment status etc.

All this information is recorded in the credit reports which are maintained by the credit reference agencies like Equifax and Experian which are the biggest in UK. This report can be taken by these companies paying some fees.

Getting a Loan with Poor Credit Rating
When a person has a poor credit rating than it becomes difficult to get the loan, also the lenders try to avoid giving loans to the poor credit people due to the high risk factors. But it is not impossible some options are:
- Secured loans by placing the house or the property as the collateral security, or high interest rate credit card, and good payment history.
- Prepaid credit card

People may have poor credit even if they are not charged against the CCJ or Bankruptcy. This may be due to some other reasons. But they also can get the loan through the options that are available. A proper research will help.