Myth Busted! These Details Are NOT Included In Your Credit Report!

Posted by Andrew Martin on June 26th, 2019

Do you remember your report card from school? The one you got at the end of the term, telling your parents how well or worse you did? The one you were terribly scared of?

Of course, you do! You have had so many sleepless and anxious nights the day before the result!

What if I tell you that report cards are not just for schools or colleges? What if they follow you right till you retire from work? Terrifying right?

But that is how it is. From the academic report comes the credit report. It is a record of how well you are doing with your borrowings and repayments.

Understanding Your Credit Report

Your credit report is a reflection of your borrowing behavior. It shows how far deep you are in debt, how well you are doing with your repayments, how responsible you are in dealing with your finances, whether you have availed the best short term loans, how stable are your residential history and some other details.

Based on all this data, your credit rating is processed, and a credit score is generated for every UK Citizen over 18 years of age. According to various credit rating systems, your score is then classified into excellent, good, bad or very bad.

Details NOT included in Your Credit Report

The main thing to understand before moving ahead is that your credit score is related to your loans and debt. The factors that do not affect your repayment capacity and financial credibility are not considered during the preparation of your credit score.

To be clear about the concept of credit report and rating, you should also know which details are not factored into your report. This is necessary so that you do not stay conscious about every step you take in life.

The elements of your life that will not have any impact on your credit report are:

• Your account balance
• Monthly Salary
• Status of Savings accounts
• Status of Current accounts
• Medical history and Bills
• Parking or driving fines
• Criminal record
• Highest Education
• Marital status, age, religion
• Beliefs
• Employment history
• Current Occupation
• Any Private loans
• Outdated public records

How does Credit Score Matter?

That is a question that would be in your mind after reading the above. The answer is that it tells the lender whether to lend you money or not.

A doctor reads your medical report and tells you whether you are fit to drive a car. This is because your medical report has your physical history that reflects your health.
Similarly, your credit report has a history of your past borrowings and reflects how your repayment behavior.
A lender can be certain of the risk involved in giving you money by studying how to report.

And the loans in the report do not just pertain to the ones borrowed from the traditional sources. The online unsecured personal loan app borrowed on bad credit or no guarantor, also fall into your credit report.

! The point to note here is that some of these online unsecured loans only affect your credit score as long as you do not default or miss the repayments. There are a few short-term loans given by the indirect lenders that help you in your time of need but might not help in building your credit score.

To Wrap Up,

Your credit score is the first thing that is checked when you apply for a loan. It is necessary for the future finances that you take care of the details that matter in your credit report. You now know which aspects can be neglected when trying to build a good credit score.