What lenders look for during a credit check

Occasionally, life will require us to rely on credit, and when those occasions do happen we want to make sure we’re getting the best deals and interest rates. Because good credit scores usually mean you’re likely to get better offers, growing and maintaining a good credit score is something we should all be doing. But what does that look like in practice?

Have you ever found yourself standing in a mobile phone shop waiting to set up your finance agreement for your shiny new iPhone, sweating as the friendly person serving you assures you that they are just putting you through a quick credit check?

It’s a strange feeling because even though you might know that your score is excellent, it doesn’t always mean that lenders agree with the numbers.


So what are lenders looking at and why is it different to what we see ourselves?

Firstly, the companies that offer credit are likely to check your credit history. This is because they want to see evidence of how you’ve managed credit in the past. From a previous mobile phone contract to paying your utility bills by Direct Debit each month, it all counts towards their decision.

Lenders use credit reports to assess whether we are:

✔ Reliable
✔ Stable
✔ Don’t already owe more than we can comfortably afford to repay


To calculate the chances that you'll make your repayments, they take the information in your application and credit report, and allocate each item a value. Each lender will use their own unique formula to calculate whether you meet their conditions to be approved for the credit you are applying for. Some lenders will be more flexible and generous than others.

So what does this have to do with your credit score?

To you and me, as consumers, there is very little way of us knowing whether the information in our credit history is good enough to pass the check. One glance at a credit report and you may feel like the 🤯 mind blown 🤯 emoji. There’s a lot to understand on your report, and as we said, each lender will be checking against their own criteria.

To try and help us (the public) understand their credit reports a bit better, the credit reference agencies started offering us ‘credit scores’.

A credit score is a number on a scale that helps us to understand whether our credit reports are looking ‘good’ or ‘bad’, relative to other people. These scores are for you to understand how healthy your credit report is looking.


But credit scores are not what lenders use when making decisions. The score is only for you to get an idea of whether or not you’re likely to be accepted or rejected.


The lenders are likely looking at:

  • Your credit history
    Have you responsibly paid your past credit agreements on time? Were there any missed payments, defaults or CCJs?

  • Measuring how well you’ll be able to afford the repayments
    They shouldn’t let you take out credit that you can’t afford to pay off – after all, that wouldn’t be good for you or the lender!

So next time you are standing waiting for the results of your credit check, just know that the lender isn’t sitting there flipping a coin to decide whether or not you can get your mobile phone on credit. They are following a formula that takes into account your hard work at building your credit history, and also how much you are looking to borrow to decide if you’re worth lending to.

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