Adverse Credit History
What is Adverse Credit History?
Adverse credit history is used to describe people who have bad or unsatisfactory credit transactions over a specific period of time. Poor credit and sub-prime are also typical terms that are used to describe people in this position.
Your credit history is derived from different information and it is from here that they can determine if you have adverse history. Credit agencies such as Equifax and Experian keep track of your credit score and they know everything about an individual as it relates to their credit. Entities that are authorized by law to see your credit history such as insurance companies, lenders, landlords, banks, banks, building societies, employers and government agencies all have access to this information. These files typically have your name, date of birth, previous and current addresses and other vital information. The credit history will also have whether you're on the voters' roll, details of your current and previous employers.
The financial information included in the history will look at your monthly payments on your credit cards, mortgage, hire purchase agreements and any loans you have.
What is Done With Your Credit History?
If people apply for the information in your credit history, then the agencies will give it to them. The agencies also keep statistical data that will help the lender make a decision whether to give you the credit or not. This all boils down to the credit score.
What is Your Credit Score?
Credit scoring is done in a statistically method. This means points are awarded or deducted from your file based on your history. Generally the more points you have is the better your credit score. The less points the worse it becomes. These points measure the probability that any credit offered to you will be repaid. It's based on the principle that it's possible to predict your future credit performance by analyzing your past credit track record and statistically comparing that with the performance of other applicants who displayed similar characteristics. The points score then enables your prospective lender to calculate the level of risk and reduce the element of subjectivity in their lending decisions.
When Does Adverse Credit History Occur?
An adverse credit history occurs when certain criteria is met. This is dependent on the lender and it is generally determined by your credit score and other factors. Each lenders policy is different and they determine adverse credit related to a certain risk. If you have a certain score then this is considered safe by them. If your points are low, then your application may be turned down or lend you a much smaller amount than what your requested.
Adverse credit is based on history and there are certain things that will drastically come off as a black mark to lenders. They are as follows:
- Defaulting on loans or mortgages.
- Late payments on loans and mortgages.
- County or High Court Judgements for debt
- You're not on the Voters Roll at the address you claim to live at
- Multiple applications for credit
- Recent Bankruptcy (undischarged bankrupts will always be refused credit)
- Repossession of goods.