Have you ever wondered why all your credit applications to lenders are denied? One of the tools commonly used to assess whether you qualify for a credit or not is credit file or report. Perhaps you might be wondering about who makes your credit report compilation. In UK, three main firms are responsible for compiling the information on how you manage your credit and pay bills. These companies are Callcredit, Experian and Equifax.
What is contained in the credit file?
It is very much important for you to understand what is contained in your credit report and how it is used to assess your eligibility for a credit or loan.
- The report will have your name and date of birth.
- Previous and current addresses.
- A list of credit accounts that you possess. These accounts include credit card and bank accounts. Included in the list are outstanding repayments on loans and utility companies. These reports indicate whether you have completed your repayments in full and on time. Late or missed repayments will remain on your credit report for at least six years. Court judgements on unsettled debts and bankruptcies will also take the same period in your report.
- Included in the report are also details of those who have financial links with you. That will bring the impression that you are on a joint credit with the parties listed.
- Public record information will also be on the report. This information include County Court Judgments, also Decrees as in Scotland. Others include bankruptcies and house repossessions, which also last for six years from the period they occurred.
- Details of overdrafts with your current bank account provider.
- Your registration details on the electoral register.
- The CIFAS section will also be in the report and will contain any record of fraud you’ve ever committed.
However, note that the report does not contain your personal information such as criminal record, religion, or salary.
Who is authorized to look into your credit report?
Your credit provider has authorization to look into your credit report, and is authorized by you. This happens when you make an application for credit. The term credit provider does not only mean banks, credit card companies and building societies, but it also includes mobile phone companies and mail order companies. As in the case of mobile phone companies, they have the right to check your credit report only if you are on a mobile contract (they won’t check it if you are on pay-as you-go).
Your landlord and employer are also capable of checking into your credit report, though to some limit. They will only view public record information, such as County Court Judgments or electoral register information.
Where can you obtain your credit report?
The 3 credit agencies in UK are obligated to provide credit reports to their respective owners, under £2 charge. You can also have access to your report via requesting a written copy or online. Callcredit operating under Noddle brand name does offer you free access to your credit report for lifetime; hence it’s worth making an application rather than making payments for statutory report.
If you haven’t checked your credit report for quite some time, it is advisable to get report from all the three agencies. This is because the information may vary as different credit agencies may have information from different credit providers
When making applications for mobile network contracts and get rejections, you’ll certainly seek alternative ways to solve your problem at hand. That is a short term solution. However, to ensure that you are not facing problems in the near future with your credit ratings, you’ll need a long term solution. That breaks down to improving your credit rating in the long term. You will need to show lenders that you can make responsible borrowing. Here are highlights of the things you can use to improve your credit rating in the long run.
Make payments on time
Always try to make timely payments. When you achieve to make payments on time, you are simply demonstrating to your credit providers that you are a responsible borrower. If you have a savings account for repaying debts, make sure the account is always accessible for preparation in times of emergencies. Prior to making payments on time, it is also important that you consider plans that are affordable to you so as to avoid payment delays.
Use credit building credit cards
Credit cards with a credit building option can really improve your credit rating. These cards work on simple terms. For instance, the credit card company will lend you £60 and you’ll sign a credit agreement where you will be making £5 monthly payments till the loan is settled fully. As the year comes to an end, your loan transactions with the prepaid card company will be recorded on your credit report as successful repayments for 12 months. That is as long as you didn’t miss a repayment at a certain month.
Take note however that prepaid cards have some extra charges. For instance, you might be required to pay £5 to obtain the card, a 2.5% charge on all your expenditures and a £1 charge for every top up you make. Always try to shop around for better deals offering lower or fewer charges.
Refrain from costly credit repair firms
There are several adverts revolving around that they can repair bad credit ratings. Most of these firms usually make negotiations with other firms that have filed County Court Judgements (Decrees as in Scotland) in your opposition. Some of these companies also claim to do things that they are not allowed by law while others may encourage you to make false statements to credit reference agencies. Never consider such firms as they will only drag you into deeper problems. In the first place, there is no reason as to why you can’t repair your credit ratings, hence there’s no point of paying someone highly to do it for you.
Get yourself on the electoral register
If you don’t exist on the electoral register, finding any type of credit can really be difficult if not impossible. Lenders usually use your electoral register information to prove your identity.
Get rid of all dormant credit cards
When you have unused credit cards, lenders usually include them in your credit rating assessments. What counts is whether there is any amount available for you in credit and not how much you are using. If there’s nothing for you, guess what can happen on your credit rating.
If you have a credit history that isn’t perfect or just good enough, getting a loan can be really difficult. If you happen to land on a loan under any circumstance, you’ll have to live up with the struggle of repaying the high interest rates. That will lead into a serious debt issue which can tarnish your credit score. Things are totally different with guarantor loans, which can offer you a flexible and affordable means of fixing your financial needs, despite your poor credit score.
Guarantor loans are different from other kinds of loans in that you’ll need a guarantor. Your guarantor can be a family member, a friend or a work colleague who willingly offers to back up the loan agreement through signing an indemnity form. On signing the form, your guarantor agrees to repay your loan, in the unlikely case of you failing to repay. In the case that missing repayments occur consistently, the credit score of the guarantor will be affected. The guarantor can be aged between 18 and 75 years of age. They should also be holders of a UK bank account, a decent credit score, and a minimum income of £1,000 per month.
Guarantor loan is a method of borrowing money based on trust, and was common in banking or development societies before use of credit score system emerged. Today, the popularity of guarantor lending is growing very fast once again, as once upon a time, you simply walked into a bank, and have a little chat with the manager and come out with your needed loan at hand. Nowadays, that is becoming seemingly impossible especially if you have a bad credit score.
Many people in UK are slowly adapting to the trust based nature of guarantor lending. This method is becoming more popular especially for those who have had their loan applications to banks rejected. It is also suitable if you have a bad credit score. If your guarantor trusts you and is willing to stand in your position, then why shouldn’t lenders trust them? When applying for a guarantor loan, decisions are not just based on what computers say about you. If you have someone who trusts you and is willing to be your guarantor, feel free to make your guarantor loan application from this source.
You are free to tailor a credit loan to match your personal financial needs, and can borrow as from £1,000 up to £7,500 over a period of 1 to 5 years. This loan amount is very high as compared to what you would get with a bad credit score from other types of lending. You can either borrow a small or large amount and the repayment can be spread over a short, medium or long term period. Since you will be dealing with a direct lender, you won’t be paying any broker fees and once your application is accepted, the money will be issued to you quickly without a fuss.
What’s more, your repayments are fixed on a monthly basis and that will grant you the peace of mind, knowing that your scheduled repayments will remain the same during the loan period.
By now you must have realized the importance of maintaining good credit ratings all the time. Your credit score has an impact on your ability to get approvals for applications of mobile phone contract, loans, mortgages as well as credit cards. If your credit rating isn’t that good, there are a couple of tips you can implement to build your rating and fix all your credit problems. The following guide will give you the way forward towards identifying setbacks to your credit ratings, hence preparing you towards improving your credit ratings.
What has impact on your credit rating?
It’s always important to refrain from things that may impact negatively on your credit rating. The following is a highlight of some things that have bad impact on your ratings.
- High debts. It is important to always maintain a lower level of existing debts as banks, lenders as well as mobile networks will be nervous at lending you more credit. High debt amounts indicate that you’re stretched financially.
- Late or missed payments. If you have late or missing payments on anything, starting from your mobile network monthly payments, mortgages, loans, credit cards, gas to electricity bills, your credit rating will be negatively impacted. Note that the stain will stay as long as 6 years.
- County Court Judgments or Decrees. If you get a judgment for any unsettled payments, your credit rating will be negatively impacted and will exist on your file for a period of 6 years.
- High frequency of credit applications. When a single credit application is made, it will reflect on your credit report, hence many applications at a go or frequently will impact your report negatively.
- Possession of dormant credit card accounts. Take note that lenders will always look into such credit cards to see how much credit is available to you, rather than just how much you are using.
- Mistakes on the credit file. Usually, if any mistakes are included in your report, lenders will also include them during assessments. If there’s any detail that is not correct, such as someone fraudulently used your credit cards to make purchases without your knowledge, immediately contact credit reference agencies to have the matter investigated and rectified.
- Absence on the electoral register. Lenders use your electoral registration information to confirm that you are who you claim to be.
- Always moving homes. Lenders will be more than comfortable to grant credit to applicants who have maintained the same residence address for quite some time. Always make sure you are not changing your address frequently in a short time spun.
- Being part of a joint credit with a person whose credit rating is poor can also impact on your own credit rating. Your ability to get credit will be affected if you have entered into a form of credit such as loans, mortgages or bank accounts with individuals with poor credit scores.
Once you’ve noted that your credit rating is not affected by the conditions listed above, it’s time to check your credit report to identify errors. Your report may have a poor rating due to fraudulent acts as well. You have a legal right to see your credit report at a fee of £2. The three agencies that compile credit reports in UK are Callcredit, Experian and Equifax. Equifax and Experian will grant you a free trial of the credit report services for 30 days, though you have to provide details of your credit card. Be sure to cancel before the 30 days period is over, less you be held liable for payments.
If you are looking for a mobile phone with a history of bad credit rating, may be due to failed repayment or the worst, bankruptcy, it can really be tricky to get approvals. This is because your mobile network provider will need your credit score to ascertain that you will be in a position to make payments as they fall due every month. The only way to achieve that is through assessment of your credit score.
Probably you have tried out to get yourself a bad credit mobile phone without success. If you have been denied somewhere, it doesn’t necessarily mean that every other network provider is going to reject your application with a bad credit rating. There are several rules that you can follow to improve your credit history and increase your chances of approval for bad credit mobile phones application.
Credit score is progressively becoming a way of life though out UK, granting people the opportunity to own properties without running into bankruptcy. The first step to making things right is by checking your credit rating via the large credit reference agencies in UK such as Callcredit or Equifax. Getting your credit report from at least three different agencies is a good idea as each covers diverse lenders. With only £2, you should be able to get your report, though you may get an introductory offer for your first report for free. Your report will explain to you why you have been refused. Watch out for minute details such as your address. A slight difference may allude to fraud and can give you a start point to rectifying the errors.
If you happen to be a victim of fraud, it can be a traumatic and expensive experience for you. That will not only be the problem, but it can also create a long lasting impression that will affect not only your application for bad credit mobile phones, but also future credit related transactions. That is because the fraud will be a stain to your credit file, and can be really tough to clean it out. The best step to take in such a situation is to alert credit agencies who will in turn mark your name as a special case and alert other creditors.
Once you have confirmed that the details on your credit report are true, or errors rectified, your next move should focus on building your credit history. You may opt for a Direct Debit and make sure that you make payments regularly. Direct Debits are automated hence give assurance to mobile network companies that you have confidence with your finances.
You may also seek specific products that are designed to help people with bad credit history. For instance, bad credit cards have high interest rates that help build up a repayment history. These cards are designed for different credit profiles, including those who are starting with credit, those who have been under credit problems, as well as for the worst conditions such as bankruptcy.
The above steps are focused towards building your credit history. Following them keenly can help you get approval for your bad credit mobile phone applications with your network providers. They will make a great impact that will not only assist you with mobile phone credit, but also credit situations such as mortgages and loans.