I imagine
that credit scores have been around in some form for a long time. Back in the days of the Victorians the bank
manager probably walked round to the local grocer and said, ‘Karl wants a loan,
does he pay his bills on time?’ But it
did come as a bit of a shock to me when I realised, a few years back, just how
much information my credit report holds on me and just how important it is. If you want a
mortgage or a loan, it’s the credit report on you that will determine what kind
of rate you’re offered and whether they’ll lend you any money in the first
place. Your credit report knows
everything there is to know about your debt history. It knows about the debt level of your credit
cards, how you pay your bills, where you live and work, if you’ve defaulted on
mortgage payments, had a vehicle repossessed or filed for bankruptcy. It’s pretty hard to keep anything secret in
the twenty first century, but that’s the way it is and so it makes sense to
make sure that your credit report shows you in the best possible light. If you don’t know your credit score you can
easily check it with Experian. You can also read about bad credit and frequently asked
questions here. Try some of these tips to help you improve your score.
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Register
to vote
Of course,
the main reason for registering to vote is so that you can have your say. It’s a right that was fought for and you
shouldn’t ignore it, but if that doesn’t persuade you, be aware that if you
aren’t on the electoral roll you might find it very difficult to get a loan, insurance
or credit card. When you apply for
finance the lender will check your credit report with three main organizations:
Equifax, Experian and Callcredit. These
organizations all use information held on the electoral roll to verify your
identity.
Cut up
old credit cards?
Just before
you reach for the scissors you need to be aware that closing a credit card account
with a zero balance may adversely affect your credit rating. Even though you’re
not using the card now, your financial history of using the card could go in
your favour. However if you’ve never used the card and have no financial
history to show, a large amount of unused credit could put off potential
lenders, as theoretically you could spend it all in one day and therefore be in
a worse position to pay off lenders. Unfortunately there’s not a simple answer
here when it comes to cancelling credit cards as lenders are all looking for
different people, so it’s best to do your own research here depending on your
circumstances.
Close
joint accounts that are no longer in use
Lenders
don’t like you to have access to too much credit because of the possibility of
falling into uncontrollable debt. You
also need to be aware that if you hold a joint account, lenders will look at
the credit reports for both people when assessing your credit rating.
Spread
out your credit applications
Every time
that you apply for credit a search is performed and recorded. If you make lots of applications in a short
space of time you will appear desperate and scare off lenders. For the same reason, if your credit
application is declined, don’t immediately try again.
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