The credit file held on you by companies such as Experian and Equifax contains information on your credit history taken from the public records including the voters role and law courts, and from lenders in the form of applications you may have made in the past. The purpose of this is to provide a generic file for everyone detailing the credit they have, payment history associated with that credit and also how they have conducted their finances in the past. This is made available to lenders when you give them permission to view your report – this is usually done when you sign an application form for a credit card, loan or other form of credit or finance.

This file becomes especially valuable to you when you are applying for a mortgage or remortgage. Though lenders have a basic set of requirements that potential borrowers must fit into to agree a mortgage, the final decision whether to lend is based on your previous credit history. If you have late payments, missed payments or, in the worst case scenario, county court judgements or defaults, the lender will see these as increased risk to them and could reject your mortgage application at the last minute.

It is important when you are looking for a mortgage that you know exactly what your current situation is, especially if you are using a mortgage adviser. To do this it is important to obtain a copy of your credit file prior to any applications. If you unknowingly have defaults registered on your credit file you could find yourself being rejected for a mortgage and possibly lose the property you were originally interested in purchasing. If you know, and your adviser knows, where you stand from the beginning they can ensure that they find the best lender for you at the first attempt, ensuring you get exactly what you need form your mortgage.

Another important factor to bear in mind is identity theft and/or fraud. This is when an individual uses your details for an application, uses your financial details to make purchases or impersonates you to the same ends. If an individual used your details to obtain a credit card and then never made payments on it you would find yourself with credit problems without knowing it, and this could impact upon your ability to obtain a mortgage. Keeping regular check on your credit file will allow you to ensure that any new checks by lenders are monitored. This will help protect yourself against identity fraud.

You can obtain a free copy of your credit file here, and Finance Now can help you find the right mortgage for you, no matter what bad credit you may have. Call us free on 08001 383416, use our mortgage enquiry form or e-mail enquiries@freshstartonline.co.uk.