Credit Problems

When searching and applying for finance, one of the key factors in the rate you are offered will be your credit history. If a lender receives an application from a person with poor credit history they will deem them a higher risk than someone with good credit history. Therefore, they will only be willing to offer a loan or mortgage with a higher rate.

Keywords:Credit History | Credit Check | Debts

Even if you have credit problems you can apply online today:
Loan Application Form | Mortgage Application Form

There are many different reasons why you may have poor credit, some may not even be your fault, but regardless of this, a poor credit history will hamper your chances of getting finance. Knowing what reasons there are for having bad credit will help you understand how it affects you and how you can avoid it.

ccj (County court judgment)

If you default on a loan or mortgage then you will receive a CCJ. If this is paid within 30 days it will usually not show on your credit file, however if you fail to repay your debt then the CCJ will go down on your record and you will be made to repay the outstanding debt with a set plan.

Arrears and defaults

If you fail to make a scheduled payment then you will be in Arrears. As long as you make these payments in the specified time then there should be no problem. However, if you continuously fail to make repayments then it will go down as a default by you. A default on any kind of payment will show up on your credit history and affect your rating.

Bankruptcy

If you have simply to many debts that you cannot repay then you may be declared bankrupt. The aim of bankruptcy is to free you from an un payable mountain of debts. However, a bankruptcy will appear on your credit file for 6 years and will make it very difficult to apply for credit again.

IVA (individual voluntary arrangement)

An IVA is an agreed payment plan to reduce your debts. A payment is made every month for 60 months. Once the debtor has agreed to the arrangement then the agreement is presented to the creditors and a vote is taken on whether the plan should be agreed to, and what changes should be made. As long as 75% agree to the plan then the IVA starts. Once this is paid the debtor is considered debt-free.