How does the uk credit rating system work?

There are points and stars, how many points are needed for each star?

How does the uk credit rating system work?
It doesn't, contrary to popular belief, give people a credit score.





What happens is that every time you take out a loan or credit card, the company will check what other debts you have and whether you have repaid them. If they give you credit, they themselves will tell the credit bureaux that you have a loan with them, how much it is for. If it's a credit card they'll report what your credit line is (the max balance they will let you have on the card), how much you owe.





Each month all the companies you have credit with will report whether or not you made the right payment that month. If you're in arrears they will report how much you are behind with reprayments. If they write off your debt or take out a CCJ against you or (worst of al) you become bankrupt, they will report you as a defaulter.





Then anyone else who you apply for credit with can check on how you have repaid your loans.





Individual companies may have a credit score for you; they analyse all your debts, your repayment history, whether you're a home-owner and in full time work, things like that. They may then use that to calculate a score and decide whether that score is good enough to give you credit.





Different factors will influence that in different ways. Being a homowner and in full time work is important and good for your rating.





If you have loans, that's okay as long as you keep up repayments. Ditto credit cards, as long as it's not too many.





Having debts to catalogues is usually a bad thing, as a lot of people don't repay catalogue bills and it's seen as a sign that you can't repay large amounts.





Each time you apply for credit, a record is made of that attempt. Having too many attempts is a bad thing, it means you were probably refused by someone else.





As a rule of thumb, making more than 5 applications for credit is a bad sign.





Not everyone views these things in the same way. A company who charges high interest rates will actively seek people with bad records, as they know they can't get credit elsewhere and will get caught in debt at high interest rates. These are known as sub-prime lenders. A lot of the peoblems with the stock market recently is because subprime lenders in the US have lent too much money to people who couldn't afford to repay and are having to write the debts off.





Not sure what you mean by points and stars ... if it's in Yahoo Answers, each time you ask a question you lose points, each time you answer you get points. If you get best answer you get more. Different points are needed to get to different levels. Don't know about the stars, I think the asker rates the answer when they choose best answer. When you get to level 2 (1000 points or so) you can rate other peoples answers. Not sure why you'd want to do that.
Reply:apart from credit rating you have to be on the voters roll. My friend has no credit problems owns own home has an overdraft from bank cant get bank credit card because hes not on voters roll.
Reply:Hi,





Check out http://financeguru.consumerspot.info for some useful info and tips on the matter. Good luck!