Credit scoring

During the process of applying for a secured loan either online, filling out a form, or over the telephone, the homeowner is asked a series of questions. The answer to each question maybe scored or a value. Depending on the lender, each score or value will either be taken into account or the total score will be used to help decide the credit risk.

It is possible that the lender may also incorporate other information into their credit scoring system such as sourcing information from a national agency such as Experian http://www.experian.co.uk/ or Equifax http://www.equifax.co.uk/ using internal data such as looking at bank accounts and existing loans that may already be held with the lender.

Loan company credit scores are confidential and are never divulged to the applicant or anyone else. The Office of Fair Trading http://www.oft.gov.uk monitors credit scoring to ensure lending is responsible and ensure standards are upheld.

Once a credit score is performed, there are several outcomes, either the homeowner will be accepted for the secured loan either on the existing terms, or new terms, or they may decline your application altogether.