A Credit Report in the UKis analysed by a method called ‘logical regression’ that predicts the probability of a borrower failing to pay his/her debt. Although different banks have different methods of analysing a credit report-UK, most of them follow this statistical approach to siphon out the bad borrowers.
As the banks do not disclose the parameters that they consider at the time of analysing the credit report, people are often left confused about the grounds on which they were rejected for a loan or credit card.
Logical regression uses different parameters, such as income and past financial records, to predict a binary outcome. A binary outcome in this case results in either ‘bad debt’ or ‘no bad debt’ outcome. Once the binary outcome is achieved, it is expressed in terms of a credit score.
Due to different policies followed by lenders, an applicant does not know the minimum credit score that he needs to have to qualify for a loan and the lender is also not liable to reveal the reasons for rejection. Therefore, a financially healthy practice is to maintain a good credit history by making timely payments and borrowing only as much as one needs.
A credit report-UK contains detailed sections on:
By going through these details one can know the debt activity. If you see any false charges or misprinted charges, you can dispute them and send them for correction. Also, identity theft could be checked by looking at the credit inquiries section.
This section contains information about the organisations or people who contacted credit agencies for your credit report. If you see any name that you did not approach, you can simply raise an alarm and ask the credit agencies to take appropriate steps.
Also, look for the account report summary to identify any loan that you have not taken. The UK suffers a lot from credit card frauds and with modern evils, such as card cloning and magnetic prints, frauds have become easier.
Available easily in the UK, an ideal way to keep a check on one’s credit history and frauds is to read your credit report-UK carefully.
