The Top 10 Things Everyone Needs To Know
While headlines shriek mortgage rates at record lows and weve seen the longest-ever 0% credit cards, these days unless youre super-creditworthy you wont get them. Whats more, the new representative APRs on loans & cards mean only 51% of accepted customers must get the advertised rate, so a poor score can mean you pay more.
Here are the need to knows:
1. You DONT have a credit rating and theres no blacklist . Ignore credit agencies attempts to flog you your specific score. It means little as each lender scores you differently (for each product). As well as your credit file, they also look at application info & any past dealings theyve had with you. So a rejection from one isnt a rejection from all. So, the aims to don some credit-rouge to make yourself credit-pretty.
2. What they really know about you . Whats on your credit file? Addresses, CCJs/ bankruptcies, 6 years credit history, credit applications, some utility history. Whats not on it? Criminal records, parking or speeding fines, your race/religion, whether youve checked your file (you see it, lenders dont), savings, salary, CSA info, student loans, credit rejections, PPI or bank charge reclaims.
3. Space out applications . Lots in a short time make you look desperate for credit and thus a worrying risk. So spread them out and prioritise. Always check files after a rejection before applying elsewhere. If theres an error, even if its fixed later, lots of apps in the meantime could hurt.
4. Check youre on the electoral roll NOW. Not being on it is the single biggest credit kibosh. If youre a non-EU citizen, you can send your notice of permanent residency to the credit agencies.
5. Check your file. Ensure you check your file for errors every year and before any major applications.
6. Use same job description & mobile number . Consistency and stability are crucial when filling in applications. While it wont hurt your credit score, it can trigger hidden fraud warnings. So if nothings changed, use the same language on all applications.
7. How to (re)build your credit score . Credit scoring works by using your past behaviour to predict how youll act. So those with no or poor histories often get rejected. Perversely, the best trick to gradually rebuild a score is get a bad credit card, spend a little on it each month (repaying IN FULL so the hideous APRs are irrelevant) to show youre responsible.
8. Forget marriage or holding hands, only joint finances count . Marriage or living together is irrelevant, the only way someone elses history can affect yours is if youve joint mortgage or bank accounts (joint credit cards dont exist). So if one partner s historys poor, keep finances separate. Plus, if you split and are now financially independent, ask credit agencies to de-link you.
9. Old addresses & unused cards are a danger . Even something as innocuous as an unused, but not closed, contract mobile phone account (which counts as credit) with the wrong address on it can kill applications, so check them all. Plus cancel unused cards, as it can look like you have access to more credit, making you less appealing.
10. Fight incorrect info. If your file infos wrong
1) Check at the other agencies to see if its there too;
2) Write to the company the problems with & ask it to correct the inaccuracy;
3) If it wont, write to each agency to add a notice of correction explaining your side;
4) If necessary, complain to the free Financial Ombudsman, which can order companies to correct errors.