What is? or Frequesntly Asked Questions

Address links are usually previous and forwarding addresses. They are created when an account is transferred from one address to another or when lenders include the address in a previous search, which is then recorded in your credit report or from information provided by you to a credit agency or a lender.

A way of dealing with debts that cannot be paid. A Bankruptcy Order will have resulted if someone has been judged insolvent in court. An Official Receiver is responsible for the administration of bankruptcies.

If you are bankrupt, the court may make a Bankruptcy Restriction Order against you if it decides you have been dishonest or are in some way to blame for your bankruptcy. The credit agencies will hold these records for as long as the court order lasts, which can be up to 15 years.

This has the same effect as a Bankruptcy Restriction Order but does not involve going to court. It follows an admission of unfit conduct by the bankrupt and is therefore likely to be kept for a shorter period than a Bankruptcy Restriction Order.

A company or organization that searches a panel of lenders for available loan products that matches the borrowers circumstances. A broker is the introducer of a borrower to a lender that is able to help with the loan that is required.

CAIS refers to the credit account information held by the credit agencies. Lenders provide information on accounts held with their customers. In return, lenders can view the same level of information when they make a search of their records during an application for credit. For example, banks that provide only information on accounts with a history of arrears can view only defaulted and delinquent accounts.

The CCA is a professional body representing the interests of small companies in the credit industry.

An abbreviation of county court judgment. This is where a person has shown they are unable to pay and have been taken to court and ordered to pay the moneys owed.

An official document issued by a county court to confirm that a judgment has been paid in full or set aside if it was paid within one calendar month.

(The UK's Fraud Prevention Service) The UK's Fraud Prevention Service. CIFAS aims to detect and prevent fraud, and so protect innocent people whose names, addresses or other details are used fraudulently by others in order to get credit. You can find more information about CIFAS at www.cifas.org.uk

A consolidation loan is a loan which is often used to pay off all of your existing credit commitments other than your mortgage. A consolidation loan is often used to reduce the amount of interest you pay by having your various pieces of credit with separate companies, wrapped into one affordable payment. You can consolidate credits from secured loans, unsecured loans, car loans, and credit cards or store cards.

Amount of time given by law (16 days in total) to allow a borrower time to consider a secured loan offer made to them, During this time the borrower cannot be contacted by the lender/broker. The borrower is able to cancel their application at this stage if they so wish.

Members of the Council of Mortgage Lenders record information about customers who have given up their homes or had them repossessed.

A term used to assess a borrower's credit worthiness based on their previous repayment history.

Used by many of the banks and high street lenders. A credit search is obtained and scored by adding together the amount of good points to your credit history e.g. No missed payments no CCj's or defaults time at address etc. The higher the score the more credit worthy you are.
In order for the borrower to be approved by the lender for a loan, they must reach a set score that the particular lender requires as a minimum.

The lender has reported that the programme account has been included in a debt management programme, for example, one organised by a Citizens Advice Bureau or the Consumer Credit Counseling Service.

A Decree is a judgment issued by a Scottish Local Sheriff's Court. Defaulted account This is an account where you have not kept to a credit agreement. A record of these accounts is kept for six years from the default date. The record will show how much money you still owe. Any default on your credit report will be shown with a status history of 8.

A default notice is a formal letter a lender sends you when you are so far behind in your payments that they have decided your relationship with them has broken down. This varies from lender to lender but happens when you are between three and six months in arrears. If you receive a default notice it might mean that the lender is planning to take legal action to recover the money, but you must be notified separately of this. A default notice will almost certainly mean that the account will be shown as defaulted on your credit report, which will make it difficult for you to get credit. This information is kept on your report for six years but the balance should be updated as you make repayments and after six years it is removed, whether or not you're fully paid up.

An agreement (in Scotland) to pay an agreed and regular sum towards your debts. This is an alternative to bankruptcy (or sequestration) and allows the recovery of debts over a period of time.

A Debt Arrangement has now ended.

The electoral roll is a list of the names and addresses of all people registered to vote in elections. Any electoral roll information in your name will be shown on your report.

A rate of interest which is fixed for the entire term of the loan or mortgage for a specific period from the date when the loan is taken out.
Fixed rates are more common on personal loans.

Where a debtor or bankrupt comes to a legally binding agreement with creditors to pay all or some of their debt. An Individual Voluntary Arrangement is an alternative to bankruptcy and means any existing bankruptcy order should be annulled (cancelled).

 The Information Commissioner's Office regulates the work of credit reference agencies and lenders. If an individual believes that a lender or a credit reference agency has not fulfilled their legal obligations they may request that the Information Commissioner investigates the matter on their behalf.

A court order that makes an un-discharged bankrupt repay some of the debt, where there is surplus income available, for a specified period of time.

Similar to an Income Payment order, but agreed out of court. Inhibition Stops a debtor selling property until a debt has been repaid (Scotland).

A judgment is also known as a CCJ (County Court Judgment) in England and a decree in Scotland.

This is the rate at which the banks lend money from each other. And due to this the rate stays very stable .The LIBOR rate has the ability to change only 4 times a year further adding to the stability. This is a popular rate for lenders to follow as its easier for them to administer and healthier for the consumer at the same time.

A previous or forwarding address or an address used for correspondence. A linked address is created by the movement of account information between addresses or as the result of lenders checking your records at a previous address.

Amount of money being lent under the loan agreement.

This is based on the equity in your property, but also includes the loan advance amount. Its used to measure the risk to the lender the higher the LTV the higher the risk .See example below of how to work out LTV
The mortgage balance is added to the loan advance, then divided by the property value to give the LTV.
Eg. £70,000 mortgage balance + £10,000 loan advance = £80,000 divided by property value of £100,000 = a LTV of 80%

Most lenders will only offer loans up to 95% LTV, however there are lenders who will lend up to 125% LTV which means you can apply for a secured loan even if you do not have equity available in your property.

This is where your mortgage balance is higher than the current value of your property.
Because there are lenders who specialise in high LTV loans there should be no issue in finding a secured loan in most cases.

A Notice of Correction is an explanatory statement that an individual can add to their credit report. It is attached to an item of data and is usually used to explain circumstances surrounding an entry on the report. Once the statement is added it will be seen by any company who makes a search and sees the entry to which it relates.

An Official Receiver is responsible for the administration of a bankruptcy.

An account or arrangement for the purchase of goods up to an agreed credit limit. A revolving account may involve numerous draw downs and repayments of a percentage of the balance, whereas the budget account credit facility is repaid by constant regular amounts.

An independent organisation set up by the Lord Chancellor's Department from which provided credit reference agencies with details of court judgments.

record information on customers who have given up their homes or had them repossessed.

This is when a council tenant has been able to buy the property they live in from the council, The purchaser will have received a discount from the council and be able to buy at a value less than its current sale value. The purchaser will have to pay back this discount if they sell the property before the discount period has ended (usually for 3-5years)

A redemption penalty is only charge if you choose to pay off a loan early. The amount of the penalty varies between lenders and the time the loan has already been held, and is usually The longer you have kept the loan the less penalty you would pay.

 Every record of a credit account will include a status history showing whether payments have been made on time. Status histories are held for up to 36 months.

This is used when a person or persons cannot provide proof of their income.
It is mainly used in instances of people who receive cash and do not have invoices or any other way of proving their incomes. IE self employed, sole traders, or even partnerships or directors of limited companies that can not provide accounts. Its simple and easy to do and is often only one piece of paper that is seen only by the lender and yourself.

 A bankruptcy order issued in Scotland is known as a sequestration.

A record of lenders who have searched your report. These are kept for 12 months.

A shared ownership property is where you only own a certain proportion (often 50%) of the property. The remaining portion is owned by a housing association of which you pay a small rent .The idea is to help people get on to the property ladder .The option to buy extra portions of the property is given at any time so you can steadily own more of the property and stepping up the property ladder at the same time. Taking small easy steps hence staircasing.

This term is associated with specialist lenders who offer finance to people who have had credit problems in the past. These lenders of a higher rate of interest than the high street lenders however are a lot more flexible to adverse credit making them the idea lender for people with CCJ's and Defaults.

As the term suggests, a variable rate of interest means the rate can go up or down in relation to the Bank of England base rate or the LIBOR rate. Slight increases or decreases in the base rate/LIBOR will not normally effect your loan payments greatly. Most mortgages are based on variable rates and can work in you favor when the interest rates are on their way down.

See Individual Voluntary Arrangement.