Submitted by: Mark Aucamp

My Credit Score Report

Money Saving Expert says if you still believe eating crusts will make your hair curl and that elephants are afraid of mice, you may also be clinging to some myth about your credit score report – and that could be harming your chances of getting the deals you need when it comes to a house owner loans, unsecured loan, credit cards, a home loan or even something as simple as a catalogue or mobile airtime account.

In the current climate, it’s time to grow up and find out what really matters to finance lenders – and what’s as irrelevant as a black cat crossing your path.

Myth 1: Credit Score Report Agencies Decide Whether You Qualify For A Deal

Lenders make this decision on a case-by-case basis – the credit reference agency has nothing to do with the decision. It simply collates the results in your credit score report and maintains it securely. And it is viewed during the application process.

What really matters is

Your credit score report is the history of your credit accounts and repayment track record that lenders check when you apply to them, to see that you’re not over-stretched and repay what you owe reliably. Make sure that your credit score report is up to date and accurately reflects your circumstances, so you should always check it before making a new application – you can see your Experian credit report for free with a 30-day trial of CreditExpert.

Myth 2: I’m On A Credit Score Report Blacklist

There is no such thing as a credit score report blacklist. Where you live, your gender, race and religion don’t affect your chances of getting credit either.

What really matters is

Your address does play one important role in relation to getting credit – providing you’re registered to vote there. Lenders use the electoral roll as a precaution against fraud, to see that you live where you say you do. If you don’t appear or are registered at an old address, you may be asked for further proof of residence or even get turned down, so cancel any outdated registration and contact your local council to register at your current home.

Myth 3: I don’t earn enough to get any credit

The amount you earn isn’t necessarily relevant, although finance lenders do set criteria for each loan, credit card or other product they offer and these could will include a certain level of income. If you earn very little, there’s a greater risk that you may not be able to make your repayments, so lenders may charge you higher interest rates to cover potential losses.

What really matters is

You ought to do your research before you apply, so you know that the deal you want matches your circumstances. For instance, you’re unlikely to be eligible for a prestigious platinum credit card if you’re a penniless student. But lenders are principally concerned that you can afford to repay what you owe and have been reliable in the past. So someone earning 100,000 who has skipped some repayments on a 150,000 mortgage might be refused, while someone earning 15,000 and paying off a 5,000 loan reliably might be accepted.

Myth 4: I’m marked down because the previous occupant of my home went bankrupt

Irrespective of whether a bankrupt or a millionaire lived in your home, or whether anyone else who lives there now has had financial problems or is experiencing money trouble now – if you share a joint credit account, such as a mortgage or credit card.

What really matters is

Possessing a joint account creates a link between you and means they’re named on your credit score report as a financial associate. At the time you apply for new credit, lenders may check their credit score report too, because their circumstances can affect your ability to make your repayments. If you split up or an arrangement comes to an end, you should always reapportion any debt and close the account – or you could suffer if your former associate has problems.

Myth 5: A discharged bankruptcy or IVA doesn’t affect my creditworthiness

Yes, it does. It stays on your credit score report for at least six years from the day it was taken out, even after you’ve stopped paying it off and are no longer bound by the agreement. This may make it difficult for you to get credit or mean that you will pay high interest rates, because finance lenders may fear that you’ll let them down.

What really matters is

A clean credit history that shows you don’t skip repayments and you haven’t walked away from a debt in recent years is a plus point. You’ve not tried to get out of debt by walking away from your debts. Skipped repayments usually stay on your credit score report for three years, so it’s always best to talk to your lender before it gets to that stage and see if you can reschedule payments. Lenders aren’t unreasonable – they know that our behaviour changes with time, so a 35-year-old who missed a few repayments when he was a 20-year-old student shouldn’t have anything to worry about.

Myth 6:I don’t have any credit so I’m bound to get the best deals when I do want it

If you have never had credit or have long since repaid everything you owe and closed the accounts, lenders have no way of understanding how you’ll behave in future.

What really matters is

You’ll want to build a credit history before you apply for anything major. For example, you might ask your bank – which knows you – for a credit card with a low sending limit, use it for everyday items and pay it off each month. That way, lenders will be able to see that you’re a sound prospect.

Myth 7: It doesn’t matter how many finance applications I apply for

You could think that only the credit you actually get will count in relation to your credit score – and lenders are certainly concerned that you could take on more than you can handle. That’s why they look at the amount you could borrow on all the cards and loans you have, rather than the amount you really owe. But applications have an impact too.

What really matters is

Every single time you apply for credit, it triggers a search of your credit score report that leaves a record. Other lenders will see this and, if you’ve applied for lots of deals within a few months, finance lenders can suspect a fraud or think you are desperate for money. If you are shopping around, you should ask for a quotation search, which won’t be visible to other lenders. When you know that you’re going to want several deals within a month or two, it’s worth staggering your applications to avoid future problems.

Myth 8: Checking My Own Credit Score Report Will Damage My Credit Status

Only searches by lenders can affect your credit status. You should check your own credit score report every day, if you like, and it will have no effect on your credit score report .

What really matters is

Regular checks on your credit score report help you to take control of your finances. You get a snapshot of what you owe and how well you’re managing, can spot old accounts you could close down and identify suspicious transactions that may indicate your identity has been stolen and misused. If you find anything you disagree with, you can challenge it with the relevant lender. To see your free credit score report online with a 30-day trial of CreditExpert.

About the Author: Writer and Publisher Mark Aucamp has been supplying content and articles to

TALK MONEY BLOG

for many years. Mark is skilled in providing MONEY ADVICE and information. Today’s information is about

CREDIT SCORE REPORT

. http://talkmoneyblog.co.uk/

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