Credit scores control all our lives. Every time you apply for a phone contract, a mortgage, or even to have access to gas and electricity, someone somewhere is examining your credit score. You may think that you have a good credit score, but this isn’t always the case. Here’s five ways in which this all-important figure might actually be holding you back…
- Loans for those with poor credit score
Even if you are late by a couple of days when you are paying a bill, this can still affect your credit score. If you are applying for a loan, this may well damage your access to funds and you could be refused finance. One way around this problem is to borrow money from a company that will take possession of an object of value and lend you money against this object. Companies, including Car Cash Point, will lend you money against the value of your car and as soon as you have repaid the debt you’ll regain ownership of your car.
- Old debts can affect your credit rating
An article in The Guardian highlighted how a woman who was applying for a mortgage nearly lost her chance of buying a new home because of some historic missed £5 payments on a bank account that she thought she had closed. The payments were trivial and dated back to 2008. Despite the fact that the woman and her partner are in full time regular employment, they were horrified to discover that a mistake on the part of the bank hadn’t been rectified and, if she hadn’t queried the matter, she may have lost opportunity to buy a new house.
- Check your partner’s credit rating
Even if you have a healthy credit score, if you apply for a loan or mortgage with a partner who has a low credit score you could be in jeopardy of having your loan application refused. It may be better for you to apply for a loan on your own and then make a separate legal arrangement if the loan is for you and your partner. Also suggest to your partner that they find ways of repairing their credit score for any future joint loan applications. The website of leading credit reference agency Equifax has some useful tips about how to repair your credit rating.
- Make sure you’re on the electoral roll
It’s always a good idea to check your credit report. Some details may be inaccurate and it’s up to you to challenge these. Something as minor as not being on an electoral roll can affect your credit rating. So, even if you don’t intend to use your right to vote, do at least ensure that your name is on the register.
- Not applying for credit can hold you back
If you carry out all your transactions in cash and don’t use a credit card, despite the fact that you may have a healthy bank balance and own your own home, you can still have problems with credit reference agencies. This is Money reported the case of Paul Harris, who was refused credit for a mobile phone contract simply because he didn’t have any credit agreements in place. He’d paid for his home in cash and rarely used credit. You should always check your details are up to date with the credit reference agencies.