Did you know... that shopping around for the best deals on cards, loans and mortgages can affect your chances of success? If too many lenders carry out a full check of your credit report - the personal financial history that lenders see when they are deciding whether or not to grant you credit - it can look as if you are desperate for money or raise suspicions that a fraud is being committed. Instead, sign up for a free, 30-day trial at CreditExpert, the online credit monitoring and identity protection service from Experian. To find out more click here You can then check that your enquiries haven't been misinterpreted as applications for credit and that any footprints make it clear you were only asking for quotes. And if there is a problem, CreditExpert will help you to set the record straight.
Did you know... that interest rates on credit cards and loans vary between five and 69.5 per cent, often depending on your credit rating? If you would like to know how to improve your rating, sign up for a free, 30-day trial at CreditExpert, the online credit monitoring and identity protection service from Experian.To find out more click here It will allow you to check your credit report, which is the information about your financial history that lenders see when they decide whether to offer you a loan and how much you should pay. And there's plenty of advice on how to improve your report and get the best deals.
Mortgages made simple
For most of us, buying a home means applying for a mortgage - and success or failure could depend on your financial history.
To assess your creditworthiness, the mortgage lender - the bank, building society or specialist provider - will not only look at the value of the property compared with the value of the loan you are asking for, but also at your ability to repay your loan and to make your payments on time.
The mortgage lender will consider five main factors:
* The information on your application form
* Past experience - if you have dealt with them before
* Whether you fit their lending criteria and customer profile
* Your credit report
* Whether you appear to be able to afford the mortgage
Your credit report
Your credit report is your personal financial history. It includes a wide range of information on your credit behaviour, from your credit cards and loans to your repayment record, previous mortgages and details of overdrafts. If you have had a court judgment or Scottish decree registered against you in the past six years for non-payment of a debt, that will be recorded - even if you have now paid off the debt.
The report also confirms whether or not your name is on the electoral roll at your current address and how many times your credit report has been searched.
Credit reference agencies - Experian is the UK's largest - hold this data on more than 40 million people and 24 million households. So it's likely that they have information about you.
To see the information lenders see, view your credit report online now for free with CreditExpert, the credit monitoring service from Experian. To find out more click here
Making a decision
When deciding whether or not to give you a mortgage, the mortgage lenders look first at the details on your application form. If you don't fit their criteria for being offered a loan, they are unlikely to search your credit report. Typical deal-breakers include being too young, insufficient current earnings or too short a self-employment history.
They may then look at any previous relationship that you may have had with them and how you conducted it.
The next step is to search your credit report. A lender may use this information to help create your credit score, by comparing you to past customers with similar characteristics. The result is a numerical assessment of how good a credit risk you appear to be. Normally, the higher your rating, the more likely the company is to lend you the money you want.
Most mortgage lenders will also perform some form of affordability check to ensure that you will not be over-stretching yourself by taking out a new loan.
To see the information lenders see, view your credit report online now for free with CreditExpert, the credit monitoring service from Experian. To find out more click here
If at first you don't succeed
Lenders turn down roughly one-third of all mortgage applicants. If you are one of the unlucky ones, you should be given an explanation. If not, ask for some guidance. For example, you may not be offering enough deposit or appear to be carrying too much debt from other sources. It may be that your credit report rang alarm bells, perhaps because you had missed some payments on a previous loan.
You can always appeal against the decision and ask the lender to look at your application again. This may give you chance to provide further information. For example, your poor credit record may stem from a one-off event that no longer applies, such as a serious illness or enforced redundancy.
Finally, there's nothing to prevent you applying for a mortgage from another company. Different lenders may take a different view. But be careful how many applications for credit you make in the short term.
If you allow a significant number of companies to search your credit report, this could damage your credit rating as it could be interpreted to mean that you are desperate for money or possibly that someone is trying to commit fraud. If you know that you have been refused credit because of your credit report, it is always sensible to check it before making any further applications.
No nasty surprises
To help avoid any nasty surprises, you can keep tabs on your credit report by signing up for a free, 30-day trial of CreditExpert, an online credit monitoring service from Experian. It means that you can check your credit report at any time - invaluable when you are applying for a mortgage, when you often need to move fast. You will also be warned by a weekly email or text message when a significant change, such as a new search, is registered.
Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report.
Getting a copy of your report before you apply for a mortgage will allow you to check that the information it contains is accurate and up-to-date.
For example, if you had a court judgment against you but have paid the debt, you should make sure the record reflects this. Equally, if you paid off the debt within one month, the judgment can be removed from your report. Or perhaps the fact that you registered to vote has been missed and your name has not been confirmed on the electoral roll. In this case, you should let Experian know. They will investigate and amend their records accordingly.
If you believe that some of the information on your credit report needs further explanation, Experian will help you to add a brief statement or Notice of Correction to your report. This will be seen and may be taken into account by any lender using the information to which it relates.
Joining CreditExpert also allows you to order a copy of your National Credit Score at the special offer price of £4.99. It only uses the information in your credit report but it will give you a good idea of how lenders will rate you.
And if you need to improve your credit report, the CreditExpert site contains plenty of advice, hints and tips that will help you to turn your dream home into reality.
Why check your credit report?
If anything in your report is out of date or gives a misleading picture of your willingness or ability to repay a loan, mortgage or credit card, it can affect your chances of getting the best deals. It can even lead to outright rejection by lenders.
Check your credit report now for free with CreditExpert, the credit monitoring service from Experian.
For example, you may have separated from a partner who has since run up debts but, because you have still got a joint account, his or her payment behaviour could be affecting you. You won't see their credit data on your report but you will find a note of any financial association.
Or you may have shopped around for the best offer, without realising you're your enquiries have been registered as multiple applications. These should show as quotation searches. If they are down as applications, lenders could think you are desperate for money, have over-extended yourself or even that a fraud is being planned.
You could even discover applications and credit accounts in your name that you did not ask for. In that case, your identity may have been used fraudulently.
The easy way to check your credit report is to log onto CreditExpert, the credit monitoring and identity protection service from Experian. Click here for a free, 30-day trial, which will allow you to see your credit report as often as you like.
If you find anything you disagree with or would like to clarify the circumstances surrounding an entry, CreditExpert will help you to put the record straight.
What's in a credit report?
Credit references agencies - the largest in the UK is Experian - collate information about your financial background and past behaviour and format this data into your unique credit report.
You can see your credit report online now for free with CreditExpert, the credit monitoring service from Experian. To find out more click here.
Lenders see this information when they decide whether or not to offer you a loan, mortgage or credit card. It influences their assessment of the likelihood that you will repay them.
Information comes from two main sources:
- Public records, such as court judgements, individual voluntary arrangements and bankruptcies. Your credit report also shows whether you are registered to vote - lenders use this as a precaution against fraud, to check that you are who you claim to be and live where you say you do.
- Information from lenders and financial institutions, such as records of the number of loans you have and whether you have ever missed a repayment.
It's important that all this information is as up to date as possible and correctly reflects your circumstances. Then lenders will make the best-informed decisions - and you will get the right deal.
The easy way to check your credit report is to log onto CreditExpert, the credit monitoring and identity protection service from Experian. Click here for a free, 30-day trial, which will allow you to see your credit report as often as you like.
The credit blacklist myth
It has never seemed easier to borrow money, so if you do get turned down, the obvious question is "Why?" swiftly followed by the nasty suspicion, "Maybe I'm on a credit blacklist."
The good news is that you're not. In fact, there's no such thing as a credit blacklist. But there is a host of reasons why you might be rejected.
Your credit report has worried the lender This unique, personal record of your credit history could show that you already have a number of loans and the lender may be worried that you will not be able to repay another. To see what a lender sees, view your credit report online now for free with CreditExpert, the credit monitoring service from Experian. You will also find advice that will help you to improve your report.
You may not fit the lender's profile For example, a credit card issuer may only give cards to people who already have fewer than three, or a mortgage lender may specialise in first-time buyers.
You are a non-standard credit risk According to Datamonitor, the independent market analyst, more than one in five adults in the UK are deemed non-standard. They may include the self-employed, others who cannot provide sufficient proof of income and people who have an outstanding county court judgment (CCJ) against them or have had their homes repossessed for non-payment of mortgage.
You move around Credit companies look for stability - for example, living at the same address for at least three years or having a long-term relationship with the same bank. So, if you move around a lot or switch banks often, this may tell against you.
Your credit score wasn't high enough Lenders generally base their decisions on a credit score, which they calculate using the information in your credit report and your application. Every lender has a different formula which can even vary from one type of loan to another.
To get an idea of how lenders may regard your application you can become a member of CreditExpert and order your National Credit Score for just £4.99. It is based only on the information in your Experian credit report, so it will not be the same as the one generated by a lender, but it will give you a good idea of what they may think. Click here if you would like to find out more.
How to improve your credit report
An easy way to see your report is to join CreditExpert, the online credit monitoring and identity protection service from Experian. Click here for a free, 30-day trial.
Check your credit report
You need to be sure that it is up to date and accurately reflects your circumstances. Keep on checking - your report changes when your circumstances change.
Set the record straight
If anything on your credit report needs updating, tell Experian and they will investigate.
Don't let debts pile up
Make your repayments on time - this shows potential lenders that you are likely to meet future repayments. Better still, try to pay off any outstanding amounts on credit card accounts completely.
Register to vote
Lenders check the electoral roll as a precaution against fraud, to ensure that you are who you say you are and live at the address you have given. If your name doesn't appear, lenders may not be able to confirm that you live at your address, so you could face ID checks or even rejection.
Protect your identity
If you notice something surprising on your credit report, such as a loan application you did not make, you could be a victim of identity fraud. Inform Experian, who will help to investigate and offer you help and advice.
Don't leave unnecessary footprints
When shopping around for credit, ask companies for a quotation before making a formal application. Lenders may interpret an abnormal number of credit application searches as indicating that you have applied for an unmanageable level of credit. They may even suspect fraud.
Tell the truth
Don't lie or fudge the truth on an application form. Lenders find out and any inaccuracies on your form will tell against you and cause difficulties in future.
The easy way to see your report is to join CreditExpert, the online credit monitoring and identity protection service from Experian. Click here for a free, 30-day trial.
Credit scores explained
The information in your credit report is key to getting the loans you need - but it is only half the story.
You can view your credit report online now for free, and order your National Credit Score from CreditExpert, Experian's online credit monitoring service. To find out more click here
Before deciding whether or not to lend money, many organisations take your report, plus additional information included on your application form, and generate a credit score. This score indicates the risk involved in granting you credit. Over the years, automated scoring has proved to be more accurate and consistent than subjective human judgement. It also allows lenders to make decisions more quickly.
Why have I been rejected?
Lenders turn down millions of applications every year. If you are one of the unlucky ones, you should be given an explanation. If not, ask for some guidance.
For example, you may appear to be carrying too much debt from other sources or your credit report rang alarm bells, perhaps because you had missed some payments on a previous loan. It may simply be that you do not fit the lender's profile for a particular loan.
To see the information lenders see, view your credit report online now for free with CreditExpert, the credit monitoring service from Experian. To find out more click here.
You can always appeal against the decision. This may give you a chance to provide further information. For example, your poor credit record may stem from a one-off event that no longer applies, such as a serious illness or enforced redundancy.
Finally, there's nothing to prevent you applying to another company. Different lenders may take a different view. But be careful how many applications for credit you make in the short term. If you allow a significant number of companies to search your credit report, this could damage your credit rating as it could be interpreted to mean that you are desperate for money or possibly that someone is trying to commit fraud.
It is always sensible to check your credit report before making any further applications. That way, you can be sure that the information in it is up to date and correctly reflects your circumstances.
Click here to visit CreditExpert., the online credit monitoring and identity protection service from Experian and take advantage of a free, 30-day trial that will allow you to see your credit report as often as you like.
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