The term Adverse Credit is used to describe borrowers who have a history of unsatisfactory credit transactions. The expressions ìsub-primeî and ‘poor credit’ describe exactly the same situation. This begs a number of questions; what credit information is used, where does the information come from and how poor must a credit history be for it to be labelled as ‘adverse’?

It’s the credit reference agencies such as Experian and Equifax which collect information about you, then process it and sell it on. In fact any one with an authorised purpose as defined by Law, can pay to see your file. This includes lenders, insurance companies, banks, landlords, employers, any government agency and anyone you have asked to provide a product or service to you.

And you’ll be simply amazed what the credit reference agencies know about you!

A typical file will have your name, date of birth and Social Security Number. It will also include your current and previous addresses, whether you’re on the voters’ roll, details of your current and previous employers, and information relating to your monthly payments on your credit cards, mortgage, hire purchase agreements and any loans you have.

Then the file will store information from public records. Details of any Court judgements in respect of your debts will all be on file. Finally the file is topped off with records of the occasions you’ve applied for credit.

All this information is collected from two main sources: Public Records offices and data supplied by banks, building societies, financial institutions and other lenders offering credit accounts and lending facilities. And quite honestly, the agencies are documenting your credit track record from the first day you appear on their computer screens.

The credit reference agencies then supply all this information to anyone to whom you’ve applied for credit. They’ll also credit score your data so that your lender can make a statistical decision on whether or not to grant you credit. Within this process your credit score becomes crucial.