Earlier this week, while having breakfast at a local café, I noticed a sign behind the counter which read, "Please do not ask for credit". Given that the most expensive meal on the menu cost about £5, I was surprised that the owners needed to warn customers in this way!
Then again, the rules are similar in the financial world. Some people find it easy to get credit, while others struggle to borrow even small sums at reasonable interest rates. Of course, the larger your disposable income is, the easier borrowing becomes, all other things being equal. However, even fairly affluent people can have difficulty getting credit. Often, this is because of information contained in a credit reference.
The phrases ‘credit reference', ‘credit report' and ‘credit history' suggest that you have only one credit reference. In fact, there are three different commercial companies which monitor and measure your ability to manage credit, known as your ‘creditworthiness'. These credit reference agencies (CRAs) are Experian, Equifax (NYSE: EFX - news) and Callcredit. Lenders use reports produced by one or more of these agencies when deciding whether to lend to you.
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[Source: Yahoo! News Search Results for credit cards]
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