What is Credit Scoring?

  Credit Scoring is the name given to the process of assessing someone's credit rating by various criteria.

  The information you give on the application form is 'scored' according to what the lender or credit card company thinks that information says about your credit worthiness. For example, being employed will be a 'positive' in your credit score, as will a high salary. Each lender gives different amounts of importance to each piece of information you supply.

Credit Reference Agencies

  Usually, the details on your application are combined with details supplied by a credit reference agency. There are several credit reference agencies who keep track, with the aid of the companies that use their services, of the financial activity of individuals.

  The two major UK credit reference agencies are Experian and Equifax :

  Records of applications for loans, credit cards and mortgages etc are kept, along with details of any defaults or County Court Judgements (CCJs).

Your Credit File

  You can contact both the above companies and ask, for a nominal fee, that they send you copies of your credit records. These records will help you identify the source of your bad credit rating, and if you find that the details are incorrect you can demand that they be changed.