When banks are assessing a loan application they ask for copies of your bank statements.
They will have a close look at the bank statements looking at your account conduct, checking what payments you have going out of your account and also checking your income going into your account.
Until recently the bank statements were the only way that lenders could check for poor account conduct.
But now as well as being able to check your account conduct on your bank statements they are also able to get a lot more information on your credit report. A lot of utility companies as well as banks and finance companies are now providing information to the credit agencies on how promptly people pay their bills or loan repayments. This is in addition to reporting on defaults and collections which are the way people are identified as having bad credit.
As mortgage brokers we are starting to see this information being used by banks and in a number of cases home loans are being declined solely due to poor account conduct that might not have previously been available for assessment.