| In a perfect world credit wouldn't exist, because people | | | | payments could lead to a default or County Court |
| would earn the money they require before making | | | | Judgement (CCJ) that haunt you for years. The same |
| purchases like a car or a house. Credit cards would | | | | rule applies to your mortgage payments. |
| only be around for us to take advantage of the | | | | If you do find you are have difficulties with your |
| benefits they can provide such as cash back deals | | | | repayment plan, the best thing you can do is speak to |
| and other reward bonuses, and no-one would have to | | | | your lender, as they may be able to help you to |
| worry about paying high interest charges. There would | | | | change your repayment schedule. |
| be no such thing as a credit history. | | | | The easiest and most effective way of making sure |
| Unfortunately, this is not the case, and many of us rely | | | | your credit cards are paid on time is to set up a |
| on a number of different types of credit to make | | | | monthly Direct Debit, allowing your payments to |
| these large purchases, from credit cards to finance | | | | happen automatically. |
| deals. | | | | Sign up to the electoral roll. |
| In order to be considered for deals offering the best | | | | If you're not currently on the electoral roll, it is unlikely |
| interest rates, lenders first take a look at your | | | | that you will be successful in your credit applications, |
| track-record and make a decision as to whether they | | | | so this is a must. Don't wait for your annual reminder, |
| see you as a risk based on a number of factors. | | | | sign up online on the 'About my vote' website. |
| It doesn't stop there, as it may surprise you to learn | | | | If you aren't eligible to vote (foreign nationals, etc), you |
| that employers and landlords can also check your | | | | can send each of the credit reference agencies proof |
| credit history before offering jobs and rented | | | | of your residency and request that a note is added to |
| properties. In today's society there are few ways of | | | | verify this to increase your chances of obtaining |
| escaping the need for credit, so your credit score can | | | | credit.monitor your credit score |
| be very important. | | | | If you have been refused credit in the past, or you're |
| How your score is generated | | | | simply curious about your credit status, you can |
| Every time you apply for credit your records are | | | | request a report from any of the credit agencies. This |
| stored and used to build towards a credit profile. | | | | does come with a fee, but this is generally less than |
| Whether you've taken out a mortgage, personal loan, | | | | ten pounds and can provide you with useful data. You |
| credit card, overdraft, contract mobile phone, utility bills | | | | can also contest any entries that you feel are not |
| or even monthly car insurance, your details will be | | | | correct, so it's well worth spending some time going |
| checked and added to in order to predict how likely | | | | through the information as your score could have been |
| you are to cause risk. | | | | tainted unnecessarily. |
| Missing bill payments or making late payments can | | | | It's good practice to check your credit reports |
| have a negative affect on your score, which may lead | | | | periodically. If possible, get a report from all three |
| to future credit applications being rejected. | | | | agencies, as there's no harm in doing so and this |
| Lenders use several pieces of information when | | | | allows you to keep a close eye on every entry - such |
| deciding whether you pass their acceptance criteria, | | | | as Credit cards bills - in your report so you can spot |
| including data held by three credit reference agencies - | | | | any error that might be causing you problems. Repeat |
| Experian, Equifax and Callcredit. | | | | the check-up every 12 to 18 months, and try to avoid |
| If you have no previous experience with credit, it is | | | | getting your report after making any important |
| unlikely that you have a credit history. This can work | | | | applications, as these can effect your score. |
| against you want to borrow, as lenders prefer to have | | | | If you would rather avoid having to pay for a credit |
| some kind of reassurance that you can be trusted to | | | | report, you can get access to a simplified version for |
| pay back the money owed, which usually gained from | | | | free by registering for a free monthly trial. This will |
| looking at your previous track record. | | | | require you to set up a Direct Debit or regular credit |
| Building a good score | | | | card payment using your payment details, but you |
| There are several ways in which you can both | | | | won't have to pay anything as long as you close your |
| improve or repair your credit score, so if you have | | | | account before the free period expires. |
| poor, adverse or no credit history at all then help is at | | | | If you do find something in the report that you disagree |
| hand. While there is no an exact science to improving | | | | with, you can request a change by writing to the |
| your score, there are several things you can do to | | | | agency. Although these amendments can be refused, |
| sway lenders' attitudes towards you. | | | | you are entitled to add your own comments as a |
| If you haven't done so already, open a bank account | | | | 'notice of correction', which may help you with future |
| and/or savings account. This may not be so simple if | | | | credit applications. |
| you don't have a respectable credit score, so you may | | | | If something doesn't look right, write a concise, |
| have to look at a guaranteed bank account, although | | | | explanatory and factual letter to detail the error, and |
| these bank accounts come with limited features, for | | | | avoid writing something too wordy. |
| example you may not be given access to a debit | | | | Space out credit applications. |
| card. | | | | One thing that you must remember is that each time |
| Apply for and make use of Credit cards. While this | | | | you make an application to any form of credit, a credit |
| doesn't always appear to be the best advice, it is very | | | | search will be carried out, and making too many |
| important in your quest to build up a good score. The | | | | applications in a short space of time can have a bad |
| golden rule which will earn you a good score is to | | | | effect on your score. You should therefore space out |
| ALWAYS pay at least the minimum repayment every | | | | your credit applications, and even for things like car |
| month, or even the full balance to avoid paying interest. | | | | insurance, mobile phone contracts. This reinforces the |
| If you have never had a credit card before it is unlikely | | | | bad credit cards choice, as you are more likely to be |
| that you will qualify for the best credit card deals, so | | | | approved for products that are aimed at those with |
| you may wish to consider applying for bad credit | | | | bad credit. |
| cards that come with higher than average interest | | | | Moving house is also likely to disrupt your score, so if |
| rates, such as the Vanquis card. Don't let these high | | | | you're planning to make any important applications |
| rates put you off, as if you ensure your balance is paid | | | | ensure they have completed by the time you come to |
| of fully each month, you will never have the interest | | | | relocate. You will also have a better score when |
| applied. Also, if you make too many applications for | | | | you're earning a salary, so if you planning to take time |
| credit within a small space of time your score can be | | | | off due to maternity leave or suspected redundancy, |
| damaged, so keep it simple. | | | | make your applications beforehand. |
| Begin using your new credit card to pay for some of | | | | Joint finances can effect your score |
| the things you would normally pay for by cash or debit | | | | If your husband/wife has a bad credit score it shouldn't |
| card, while making sure you keep the money aside to | | | | impact your finances, providing their data doesn't |
| cover the monthly bill. This will help to show lenders | | | | appear on your file. |
| that you can effectively manage your credit while | | | | By becoming 'financially linked' to someone through any |
| keeping on-top of your payments. Provided you pay | | | | product who has a bad score, such as a mortgage or |
| off your credit card balance every month without fail, | | | | a joint bank account, can cause negative effects to |
| you will never pay a penny for using the card, and you | | | | your score. Even simply opening a joint bills account |
| will be building up a valuable credit history. | | | | when sharing a flat can mean you're co-scored. |
| If you find you are unable to pay off your balance in | | | | The general rule of thumb is if one partner has a bad |
| full on some occasions, just make sure you pay off at | | | | credit history, keep your finances separate wherever |
| least the minimum repayment amount. Even if you're | | | | possible. |
| struggling, this should be your priority as missing | | | | |