CREDIT RATING AND REFERENCES

1/ Introduction to credit referencing. 2/ Top tips to improve your credit rating 3/ How to obtain your credit file. Introduction to Credit referencing When you apply for any type of credit-based products, the lending company will set up a credit profile of you. Whether you are accepted as a customer will be dependent on your credit profile. This is used in all of the following instances. * make decisions about credit and related services (e.g. mortgage, personal loan or credit card) for you and members of your household. * make decisions on motor, household, life and other insurance proposals and insurance claims for you and members of your household. * trace debtors, recover debt, prevent fraud and to manage your accounts or insurance policies. * check your identity to prevent money laundering, unless you provide us with other satisfactory proof of identity. To do this they carry out credit referencing (1.1), credit scoring (1.2) and fraud prevention agency (1.3) checks. 1.1. Credit referencing. This is initiated through a search with a Credit Reference Agency. These agencies keep a record of how you have conducted your credit in the past. It will also keep a record of the searches. After you open a credit based product, the lender will provide the agency with regular information about how you use it. Other lenders may use this to make decisions on future applications for credit. It may also be used for tracing debtors and to prevent fraud. The lender also searches the public records such as the Electoral Roll that are available from Credit Reference Agencies to help verify your identity. Credit Reference Agency records also hold 'associations' linking your financial records with others when you apply for accounts in joint names and previous addresses when you transfer your credit from one home to another. Your financial records, and those of anyone financially associated with you, may be considered in any future applications you make. You have the right to apply to the Credit Reference Agencies for a copy of your credit file. If there is anything incorrect on your credit file, you have the right to ask the agencies to add a Notice of Correction. A lender can use one of three credit reference agencies : Experian Limited, Equifax plc or Callcredit plc. The agencies' addresses are: Experian Ltd Consumer Help Service PO Box 8000 Nottingham NG1 5GX www.experian.co.uk Equifax plc Credit File Advice Centre PO Box 1140 Bradford BD1 5US www.equifax.co.uk Callcredit plc Consumer Service Team PO Box 491 Leeds LS3 1WZ www.callcredit.plc.uk 1.2. Credit scoring When you apply for a credit-based product, the details you provide, the information the lender already have and information from credit reference agencies are used to assess credit risk using a technique called 'credit scoring'. Various factors in all these details help to assess the risk. A score is given to each factor and a total credit score obtained. If your score is above a confidential pre-set pass score, the application is likely to succeed. 1.3a. Crime prevention and detection Lenders have systems that protect their customers and themselves against fraud and other crime. Customer information can be used to prevent crime and trace those responsible. They may check your details with fraud prevention agencies. If you give or provide false or misleading information and fraud is suspected, it will be recorded. This may seriously affect your ablilty to obtain credit in the future. 1.3b. Money laundering and statutory obligations To comply with money laundering regulations, and to help stop criminals using financial products or services to launder money, there are times when we need to confirm (or reconfirm) the name and address of our customers. We may need to do this whether you are applying to be a new customer or have been one for some time. For more details about identity checks on account opening, please ask for our leaflet 'Your Personal Details - How to help us prevent crime'. Some Acts of Parliament oblige us to disclose information about our customers to certain bodies with statutory powers. For example, we must give information to authorised benefit fraud investigators where fraudulent benefit claims are suspected. In addition, the Inland Revenue has the statutory authority to audit our customers' accounts from time to time. All lending is subject to status and past credit history. Once you are accepted for lending you will be sent an agreement offer for you to complete and return. Before applying for credit it is important to make sure that you are able to maintain repayments on the loan until completion. If you do not maintain repayments the lenders will look to recover their loss through all available legal means. Defaulting on loan repayments can also seriously affect your ablilty to obtain credit in the future.

2/ Top Tips to Improve Your Credit Score Ensure you are registered on the Electoral Roll. If possible make more than the minimum payment every month. You will benefit by paying back your debt quicker, paying less in interest and you will build a positive payment history. If you have paid your County Court Judgment make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies. If you have been refused credit, obtain a copy of your credit rating. DO NOT carry on applying elsewhere. Each search by a lender will leave "footprints" on your credit file, and this may look like you are financially over stretching yourself. If your circumstances have changed then say so. You can place a Notice of Correction on your credit file explaining your financial situation, which a lender will review when accessing any credit applications you make. For example if you were made redundant or have recently divorced and have fallen behind on credit repayments. Avoid carrying a balance that is more than 30% of your credit limit (creditors may view it as excessive debt and that you may not be able to keep up with repayments).

3/ How to obtain your credit file. There are 2 main agencies where you can obtain your credit file - Equifax & Experian. To get the best information regarding your credit availability we suggest the following. a) Obtain the credit rating guide from Equifax. b) Obatain the credit report from Experian - although you are able to obtain a credit report from Equifax, the report from Experian has additional details.

Equifax 1. Click link to go to homepage.www.equifax.co.uk. To obtain Equifax credit report by post click here, print, complete form and forward. You should receive the report in 5-7 days. 2. Click on Personal solutions 1 - takes you to the following page (below), giving 3 options.

Equifax Homepage

Personal Solutions page

#1 - gives the statutory credit file (the one you have the right to see under the data protection act). Costs £2.50 and is sent to you by snail mail (i.e. takes 5 -7 days before you receive). #2 - Credit rating guide - gives an analysis of your credit rating as how a lending company may look at it. Rates your likelyhood of obraining credit from very poor - Excellent. Higher the rating more likely you will get credit. Also give information where your credit rating is weak.

#3 - gives instance access to the credit file (same as #1), which you can print out immediately.
Experian credit file.
1. Click link to go to homepage.www.experian.co.uk. To obtain Experian credit report by post click here, print, complete form and forward. You should receive the report in 5-7 days. 2. Click on Consumer Advice (#1) and follow instructions.