Newspaper article Evening Gazette (Middlesbrough, England)

Give Yourself Credit for Everything You Do

Newspaper article Evening Gazette (Middlesbrough, England)

Give Yourself Credit for Everything You Do

Article excerpt

Byline: Martin Lewis

CREDIT scoring has become a key part of our financial lives. It impacts far more than most people think. It's not just about whether you can get mortgages, credit cards and loans, but can also affect contract mobile phones, monthly car insurance, bank accounts, even if you can pay energy bills the cheapest way.

Even if you're accepted, we live in a 'rate for risk' world, so credit scoring then dictates what you pay too. So here's what you need to know...

You DON'T have a universal credit rating - there's no blacklist THIS is a myth. In the UK, there's no universal credit rating or blacklist of banned people. Each lender scores you differently and secretly. So a rejection by one doesn't mean a rejection by all.

A key part is assessing the risk of non-repayment. If that's high, many won't lend to you; but some specialist lenders will like you more as they can charge more. Yet even those who are good risks can be rejected, because the lender thinks you won't make it money. Or perhaps you're applying for a credit card, but it wants to cross-sell mortgages, so scores you on how likely you are to get one.

What they know about you LENDERS assess you with three key pieces of information: 1) YOUR APPLICATION FORM. Many underrate how crucial this is. Be consistent on each form, eg, job title, salary. Inconsistencies can trigger rejection as you hit a 'fraud score' trigger.

2) ANY PAST DEALINGS WITH YOU. A lender you've banked with can interrogate your behaviour far more than others. This can work both for and against you.

3) YOUR CREDIT REFERENCE FILES. These come from either Equifax, Experian or Callcredit and contain information on the electoral roll, court judgements, what credit applications you've made, products you have and if you've paid on time. However, they don't know your criminal record, medical history, speeding fines, salary, student loans, declined applications and more - don't get too conspiracy theorist about it.

How to make yourself more attractive LIKE people, different lenders find different things attractive. It's more art than science, but there are some cosmetic changes that work for most.

HERE ARE 10 TIPS: 1) Get on the electoral roll. If not, getting credit's tough. Apply via www.aboutmyvote.co.uk. If you're not eligible, write a notice on all the credit files that you've proof of residency.

2) Stability's good. If possible, put a landline, not mobile, on applications.

3) Beware of over-applying. Too many applications for products especially in a short space of time can hurt. So if you're about to get a mortgage, don't apply for lots of credit cards just before. One problem though is often the only way to know what rate you'll get is to apply, so the system is anti-shopping around. …

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