MAKE SURE YOUR CREDIT HISTORY IS IN GOOD HEALTH BEFORE YOU APPLY FOR NEW CREDIT
Research* by leading online credit information provider, Equifax, has revealed that over a third* (36.8%) of consumers surveyed were turned down for credit in 2011. From mortgages, loans, credit cards, store cards, through to mobile phone contracts, applying for new credit in 2012 could continue to be a challenge for consumers. Equifax is therefore urging consumers to review their credit history before they make an application.
“Lenders make checks with credit reference agencies to see whether an applicant has kept up to date on repaying their credit” explained Neil Munroe, External Affairs Director, Equifax. “So it’s vital consumers keep up to date with repayments to ensure their credit history is in top condition.”
“Having several credit cards with high limits and missing repayments can be cause for concern for lenders. Such discrepancies can result in an individual being unable to obtain new credit.”
“However, not all is lost for consumers whose credit history is not in good health. At www.equifax.co.uk we offer online advice to people looking to improve their credit history. After all, it could be something as simple as not being registered on to vote which is affecting their ability to get credit. But even if it is something more serious, our expert advice is available to help consumers get back on track.”
TOP TIPS TO IMPROVE YOUR CREDIT SCORE
Are you Registered?
The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is vital, therefore, that you are registered on the electoral roll at your current address.
Are you credit active?
Not having many credit cards or loans can affect your credit score. Lenders are looking for signs that you are capable of repaying money you have borrowed. So it’s worth considering opening an account to establish a credit history - even if you pay it off in full at the end of every month.
Change of Circumstances
If your circumstances have changed and you have had difficulties keeping up with credit payments, then it’s important to say so, for example if you were made redundant or recently divorced and have fallen behind on credit repayments. You can place a Notice of Correction on your credit file explaining the background to any arrears, especially if you have now got back up to date. A lender will review this when assessing any credit applications you make. If you believe a lender/company has provided incorrect information on your credit file, you can raise a Notice of Dispute with the Credit Reference Agency and they will take this up with the lender. This will usually be resolved within 28 days.
County Court Judgments (CCJ)
If you’ve had a CCJ and it is now settled make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies, otherwise it will stay on your file for six years.
If you have a default on your credit file, it will stay on your file for six years and may affect your getting credit. This is when you can use a Notice of Correction.
If you have been refused credit, obtain a copy of your credit report. But DO NOT carry on applying elsewhere. Each search by a lender will leave a “footprint” on your credit file. Too many searches in a short space of time can be perceived by lenders as you over-stretching yourself financially and could therefore negatively affect your ability to get credit.
Avoid a high balance
Avoid carrying a balance that is more than 30% of your credit limit. Lenders may view this as excessive debt and that you may not be able to keep up with repayments.
It’s easy to forget a payment so setting up direct debits and standing orders with your bank will ensure payments go out on time.
Close it Down
Make sure any accounts you don’t need or use are closed. Financial companies are paying more attention to the total amount of credit available to an individual and whilst you may not be using them, dormant accounts could affect your ability to get credit.
Early Bird Catches the Worm
Try to pay off loans and credit agreements ahead of schedule. Lenders will look favorably on this.
Equifax recommends that anyone planning to make a new credit application obtains a copy of their credit file so that they can see exactly how their address is shown. This is how it will be checked by lenders. And if they believe the address is not properly presented, they can ask the credit reference agency to take this up with the lenders and the local authorities.
The Equifax Credit Report, with the facility to access credit information for the first 30 days free, is accessible simply by logging onto www.equifax.co.uk. Designed to help individuals understand their credit file and see what lenders see to assess new credit applications, the Equifax Credit Report also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life’s challenges.
If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
*Survey conducted amongst 1,341 Equifax Customers in December 2011
For further press information please contact: Louise Fowler, Clare Watson, Tiffany Collins or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: firstname.lastname@example.org
Equifax is a global leader in consumer, commercial and workforce information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 17 countries and is a member of Standard & Poor’s (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.