A credit check happens when your credit file is assessed by a lender or other creditor with the purpose of finding out information about your credit history and current situation. This information is used by them to assist in making a decision about whether to offer you their finance. Your credit file contains your key personal details, the credit you currently have left to pay, the credit you have had in the past, how often you make payments and details of whether you have missed, paid late, or paid the right amount.
Carrying out a credit check allows lenders to find out your reliability. If you pay on time and in full each month, lenders are more likely to feel positive about offering credit, as they can see that you’ve kept to finance agreements in the past. In contrast, if you’ve defaulted on payments previously, you may find it difficult to get further credit, as lenders may consider that you’re less likely to keep up with repayments in an agreement with them