Whats the difference between Credit Scoring and Credit Checking?

Credit Scoring

is when credit reference agencies use the information from lenders about hat you have paid on time, paid late or defaulted on,  to create a score of how good a risk you are to lend money to. 100%  credit worthy means you’ll be able to apply to most lenders and get credit quite easily

Experian for example runs their scores from 0 – 1,000  and yes it is possible for people to get 999 credit scores, I have even seen people 3 years out of an IVA with credit scores of 989 !  It’s all about how you manage your credit afterwards.Experian-Credit-Score range

With Credit scoring – you have to achieve a certain minimum score for you to be acceptable to a lender, and lenders will vary the scores they accept based on risk to them,  so eg a person asking for a 95% mortgage might need to have a score of 970+, whereas a person applying for a 60% mortgage might only need 850+  with the same lender.

Read through these pages to get a better idea of what you should and shouldn’t be doing !

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Credit Checking

So whats the difference ?  what is credit checking,  well there are lenders out there that DON@T CREDIT SCORE  – they don’t run any scoring system at all,  they simply have a set of criteria and you either meet it – or  you don’t….

eg.  lets say a Person is a discharged bankrupt with no further credit issues and a GOOD Experian score of 885   –    Lenders A & B  BOTH lend to people 3 years discharged from bankruptcy and BOTH lend 80% ltv,  Lender A – credit scores and wants a score of 935+  , whereas Lender B just credit checks and wants to see evidence that the bankruptcy was indeed discharged 3 years ago – and doesn’t do any further scoring.

If the person applied to Lender A  – they would get declined as they only have a credit score of 885, whilst the lender wants them to have a score of at least 935.   BUT the same person would get accepted by Lender B  as they don’t require an actual ‘score’

So how do you know which lenders to approach ?  well thats why you’d use someone like us to help you get the best mortgage deal !