The usual procedure for getting a loan form a bank is to provide proof of your capacity to repay the loan among other documents requested by the lender. The banks need some independent verification of your creditworthiness before deciding on your loan application. This is where the credit bureaus come into the picture. These bureaus provide the necessary information to the financial institutions which is used by them to approve your application for a particular type of loan. The final decision is always with the lending institution, the bureaus only act as a source of information and have no role to play in the decision making process of the financial institution.

How is it that the credit rating agencies decide your creditworthiness? These agencies use multiple sources of information to arrive at a score for a particular individual. These sources may be tertiary sources like your utility service providers or primary sources like the bank that you do business with to find out more details about your debt servicing capabilities. This rating is in fact a boon for individuals as they can use their good record to buttress their future requests for personal loans.

The mechanism has been working well as the bureaus are independent agencies and work on the basis of verified financial transactions generated by you on a daily or monthly basis. There is no room for subjectivity in the rating that you get from the agencies and the score is a direct reflection of your personal capacity to handle debt.

The agencies do not hold any details of your assets or your monthly income. The only information that they have is your repayment capacity and other financial dealings with lending institutions. This has been done to maintain the objectivity of the rating system. The score is just a reflection of your dealings and does not pass a judgment on you. It is entirely up to you to maintain a good credit score. No one can impact this information except yourself.

It is always advisable to have a copy of your ratings with you as you can find out how you are being rated by the bureaus and can then modify your financial behavior to improve your score and get a better chance of securing debt from the various financial institutions in the uk. It is easy to get the copy of your report from the rating agencies like experian and equifax.

Both these companies have displayed all the procedures clearly on their websites and all you have to do is to fill in the form online and you can access the information that these agencies have built up about your financial dealings with lending institutions. You should get your credit report twice a year and track all the entries that are made on it. You can even use the information that it provides to prepare a personal financial profile that can then be used to provide a snapshot of your current financial activities to the banks when you approach them for getting a loan or a mortgage.