Advice
Down with Debt
Informs - Advises - Educates - Unbiased - Free
Are you drowning in debt? Unable to pay your bills on time or at all? Getting angry telephone calls and letters? Worried over the future?
Learn how to cope, to regain solvency and control your personal or business finances
Credit Status
Your credit status allow you to borrow money or obtain credit. The better your status the better the terms you can secure.
People with a poor credit status may be able to get credit at higher rates than normal and therefore potentially get into debt more easily. Limits of lending to low status people are however usually lower.
Things that affect your credit status
-
Being employed and for several years
-
Being a home owner
-
Being on the telephone
-
Being at the same address for more than 3 years
-
Having no county court judgements against you
-
Arrears with current credit accounts
-
Searches on your file by banks etc to perhaps indicate previous rejected applications.
Firms which you ask for credit or a loan will make a search with a credit reporting agency such as Equifax and Experian and base their decision on that. You can obtain a report on their files on you and ask for any errors to be corrected.
A lender who rejects your application for credit is required by law to tell you which agency they used to make their decision, and the process for obtaining a report they hold on you. A small fee applies usually £2 or so.
Your credit status is valuable and allows you to obtain credit, however can lead you into debt before your status report reflects current debt problems.
Restoring a bad credit status following a restructuring of your finances needs a steady approach as follows
-
Contact BOTH Equifax and Experian and get their reports on you - this costs £2 from each.
-
Check that and see any errors if so send a letter to the agency and ask for your record to be updated.
-
Check any debts shown in arrears which you have no repaid in full, send a copy of the settlement letter to the agency and ask for your record to be updated.
Whilst credit reports should in theory only reflect YOU, you can get into difficulties with;
-
Previous occupiers of your home who had a bad credit history
-
Other occupiers of your home such as family members or lodgers who have a bad credit history.
You can write to the credit references agencies ( Equifax and Experian ) and ask for a form of dis-association where you wish to have any credit report purely on you and you alone, and not linked to others with a bad credit history or one worse than you at the same address.
A member's wife was turned down for £100 credit with a mail order catalogue who had no current borrowing or debts. The decision seemed to be based on her sons bad credit record (they shared the same initials and surname), although this was not confirmed showed on the credit report for her she obtained from one of the reporting agencies.
Useful web sites
http://www.jaygaltd.co.uk/your_credit_status.htm