FAQs*

What is credit scoring?

When you apply for any credit product, such as a personal loan, a lot of lenders use a system called credit scoring. This helps lenders determine whether to give you credit. Credit scoring is based on real data and statistics, so it usually is more reliable than subjective or judgmental methods.

Personal information given in your loan application, and information gathered from credit reference agencies is given a 'score' and the total score indicates the level of risk involved.

Information in your application about you, such as salary, occupation, time in job, time at address, etc and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points -- a credit score -- helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.

Credit scoring models are complex and often vary among creditors and for different types of credit.

*Nothing in these FAQs constitutes advice and is intended for general information purposes only. For qualified advice, please speak with UK Personal Loans Limited 08000 196 777.