Many people encounter credit problems. It may be that you defaulted on a loan or didn’t pay your phone or utility bills or even declared bankruptcy. There can be a variety of reasons why this happens but it doesn’t necessarily mean that you won’t be able to get a loan or lease.
Check your Credit History – In the first instance, you should check your credit history to find out exactly what is listed on your credit file. Your credit file contains information about all of your credit activity over the past 7 years, including things such as loan and credit card applications, mobile phone accounts and in-store finance. It details application dates, the company that you applied to, the amount that you applied for and what type of credit it was. The file also shows overdue accounts, payment defaults, bankruptcy and court judgement information.
How your Credit History is used – Lenders (banks, finance companies) can access all of the information contained within your credit file, and they use this information along with other details that they collect as part of their application process to determine your credit rating.