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Credit History - what is the purpose of a credit history?

Companies look at credit histories to help them decide whether they should lend money to people. They can’t tell if you’re going to pay your bills in the future so they feel the best way to decide if you will make a good customer is by looking at how you have behaved in the past.

If you are doing anything like applying for a mortgage, a credit or store card or want to buy something from a catalogue using credit, the chances are the company you are applying to will look at what is known as your credit reference file before deciding whether to lend to you. They need your permission to do this so they’ll probably request it on the application form for whatever it is you’re applying for.

  • If you have a financial link with another person, for example you have a joint bank account or credit card, the other person’s name will show up on your credit reference file too.
  • It is not the credit reference agencies that decide whether a company should lend money to you or not. They just pass on all the information that they have gathered on you.
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