Considerations when borrowing money

When you are applying to a financial institution to borrow money you are generally asked to sign a form that will grant the lender authorisation to check on your credit score with your countries credit reference agency.

A credit score check is quite often the first thing that a financial institution (lender, insurer, bank or credit provider) will do to establish the type of loan product that may be available to you. Your credit score may well be a deciding factor in the setting of your interest rate if you are successful in your application.

Once you have given your permission to the lender to access your credit history the credit check is reasonably straightforward. The lender will be able to view all the information held on your financial history including bills unpaid and in some countries all details of credit applications whether successful, or not. Some of this information in your credit score report

you may not even be aware of yourself.

If you are intending to borrow money or apply for a new loan you should get a copy of your own credit score from your local credit reference agency and make sure that the details contained in the report are correct. Sometimes information that should have been removed is unintentionally left on the file. Sometimes the information should have been on the file of someone with a similar name. If you find inaccurate information you should contact your

credit reference agency and ask them to clear these incorrect items.

A quick internet search will direct you to the applicable credit reference agency for your country and a report can be made available to you generally for around $20 US. This is the same report that any prospective lender will be researching before agreeing to loan you money and so study it carefully before you apply for credit.

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