“Your credit history lists all of the credit you’ve had over the past six years, together with whether you have made your payments on time or late and in full or in part...”
What is your credit history?
Your credit history is used by lenders to help them determine how big a risk they would be taking if they lend to you. To help them make this decision they don’t just use your credit history of course, they also use the information you’ve provided in your credit application and any past information they have on you (if you’re an existing customer of theirs) to generate your credit score.
This score will vary from lender to lender, so just because you’re turned down by one doesn’t mean you won’t be accepted by another. That’s why it’s not really worth focusing on one ideal ‘credit score’ – it’s more important to make sure you have a good credit history.
Ocean offers a range of loans for bad credit, so even if you’ve missed payments or have had CCJs in the past, you may still be able to take one out.
Your credit history lists all of the credit you’ve had over the past six years, together with whether you have made your payments on time or late and in full or in part. Your credit history will also show if you have a current account, your address, and anybody that is financially linked to you (this is when you have a joint credit account with another person). It will also show any credit applications you’ve made that have generated a credit search, as well as any defaults or CCJs.
“Some lenders may accept one or two missed payments so long as they were more than a year or two ago...”
How will my credit history affect the lender’s decision?
As one of the main points of reference for a lender, your credit history can have a big impact on whether they’ll be willing to accept you for credit.
Some lenders want to lend to customers that have never had problems with credit in the past – so they are looking for people whose credit history shows that all payments have been made on time and in full. These lenders – which are often the high street names – tend to offer the most competitive interest rates as they specialise in low risk borrowers.
Other lenders are happy to lend to borrowers even if their credit history shows that they have had problems managing credit in the past. Some lenders may accept (say) one or two missed payments so long as they were more than a year or two ago. Others may even lend to people who have had recent problems with arrears, CCJs or defaults. These tend to be more specialist lenders and they often charge more – reflecting the higher risk involved in lending to this type of borrower.
Find out more in part 2 of our credit history guide.