Tag Archives: credit history

Can Payday Loans Repair Poor Credit Scores – Revisited

So can a payday loan or short term cash advance really help a poor credit rating?

I was re-reading an article on payday loans and credit scores that I wrote back in November 2011 and realised that it hadn’t really answered the question.

Well – it hadn’t answered the question to my satisfaction, which is why I felt it needed addressing again – so consider this article it’s official SEQUEL!

After looking at payday loans and the way they’re administered and whether they actually appear on credit scores I finally came to a conclusion that I was happy with.

A number of years ago, when monthly cash advances first made their mark in the UK, the industry was still too fledgling and too far removed from traditional financial services for it to be considered as a credit scoring factor. However, more recent research suggests that this is no longer the case.

When you take out a payday loan with a reputable supplier – be it Wonga.com, PaydayUK or QuickQuid, the loan will appear in your credit score.

More importantly – when you repay the short term loan this will also appear on your credit score. This suggests that payday loans could be more useful than a simple emergency source of credit.

Think about it for a minute… you badly need credit to help pay bills or help buy a new car. Unfortunately no one will lend to you because your credit history is just too poor.

But hang-on a second – you’re no longer the irresponsible spender you once were. But the lender or credit card company doesn’t know that – based on your credit score.

So you turn to a payday lender for a quick, short term loan – you repay the full amount at month-end. This positive repayment is shown on your credit history – indicating that you are once again a good bet.

Now I’m not advocating payday loans as the saviour of poor credit scores… but this example surely shows you the potential.

How to Control Anxiety Over Bad Credit

It’s not uncommon to find yourself in a poor financial situation. Layoffs, underperforming investments, unforeseen expenses, and budgeting mistakes can all lead to issues with managing your finances, and when those issues start to cause debt, it can lead to bad credit.

Bad credit affects people more than just financially. It can also lead to a great deal of stress. Those that are suffering from bad credit often feel as though their lives are going to be forever changed – as though they will be unable to overcome their credit issues.

This can cause a lot of stress, and indeed, it appears as though many people suffer from anxiety issues because of their financial situation. That’s why it’s important for your mental health to control this stress while you rebuild your credit.

Tips to Control Stress Due to Bad Credit

· Create a Financial Plan

Easily the most important tool for controlling your stress is to have a plan in place to rebuild your credit. Your budget should be planned out as best you can, with details that will ensure that you keep to it. Financial planning gives you an eye towards the future, and it shows you how you’re going to make sure that your credit score sees genuine improvement over time.

· Create an Emergency Account

Related to creating a financial plan is creating some type of emergency account that you can use to pay off bills in the event of an unforeseen expense. It’s not just planning for the unforeseen expenses – it’s also preparing for the other bills you need to pay in order to keep rebuilding your credit. When you have this emergency account, you’ll find yourself less concerned about what happens if something comes up financially.

· Learn Proper Credit Strategies

It’s also a good idea to take some type of credit class or research smart credit decisions. When it comes to controlling your anxiety about your finances, knowledge provides a great deal of power. As long as you know what the right decision is each time, you won’t doubt yourself and you’ll be far more confident when you’re dealing with your debt.

· Organize Your Bills and Bill Pay

Organization is also an important tool for reducing the stress of low credit. You know that you’ll have to make every payment from now on, and if you’re still finding every bill and forgetting which ones are due when, you’ll put yourself in a position to panic. Sign up for bill pay when possible, and make sure that you have some type of reminder calendar to ensure that you make each payment on time as needed.

· Find Free Finance Hobbies

Finally, it’s helpful to get a little bit of extra money in your pocket when you can, in order to fund the emergency fund and decrease the stress you experience over finances. See if there is anything you can do for free (no financial investment) to earn a bit of extra money. Even something like mowing lawns or starting a blog can be beneficial. You may only work a couple hours per week on these projects and make very little, but that extra money can fund your account and reduce some of your financial stress.

Controlling the Anxiety of Poor Credit

One of the main reasons to have good credit is so that you can improve your quality of life. But if you’re letting the stress of overcoming your poor credit impact the way you feel, then you’re not experiencing that quality of life you crave. Use the above tips to reduce anxiety while you rebuild your credit and you’ll find that you’ll not only improve your credit score – you’ll improve your life as well.

About the Author: Ryan Rivera experienced significant stress from his financial decisions. He has a website about controlling anxiety at www.calmclinic.com.

Applying for credit isn't always what its cracked up to be. For many people with a poor credit history it's certainly not that simple.

With the British economy in the dire state it’s in many people are struggling to meet monthly payments. Unfortunately this can have severe consequences on personal debt as well as on the customer’s credit score.

Council tax bills and credit cards tend to be the most commonly missed payments – which will hardly come as a surprise to many. However, the likes of payday loan repayments are probably not too far down the list either.

So what can you do to ensure that your credit score is in tip top condition for the year ahead? Check out these top tips:

Pay off existing debt.

If you are looking at applying for a credit card, payday loan or other form of credit then it’s really important that you make sure you have repaid any existing debt you may have. Whether this is in the form of unpaid council tax bills, outstanding credit card balances or utility bills – it’s important to make sure your credit history has a clean bill of health.

Sign up to the Electoral Roll.

This might sound odd but did you know that signing up to the Electoral Roll is one of the best ways of improving your credit schore? A number of credit referencing companies actually check against the Electoral Roll to help fight identity fraud. This is why it’s essential that you make sure you’re signed-up to it.

Check what the credit reference firms have on file about you.

We see these adverts almost daily – especially since many of us spend so much time on the internet. However, it’s important to consider signing up to the likes of Equifax or Experian to keep a close check on your credit score. This not only gives you information on your credit history but it will also flag up any repayments you may have missed. It can also help to keep track of potentially fraudulent activity on any of your personal accounts – allowing you to remedy any issues that may arise relatively quickly.

Do you have a credit history?

If you are lacking a credit history then it can be difficult to obtain any form of credit… sound strange? Well it probably is, however, lenders are less likely to trust customers who have no history of borrowing money. This is largely because lending firms are unable to see how you behaved previously when it comes to repaying debt – as a result they will be unable to predict how you are likely to behave when it comes to repaying the loan they extend to you. This sounds incredibly unfair but there are loan and credit card companies out there who will lend – however you may be restricted to a low balance and you may start off paying a higher rate of interest to begin with. In spite of this it is worth considering as this will improve over time and as a result you will improve your credit history as a result.

Security firm urges caution over online credit card spending

People using credit cards have been cautioned over giving out personal information to the wrong sources whilst online.

Security expert with Norton (the anti-virus firm), Con Mallon, has warned that people who use social networking websites such as Facebook as the most at risk since they are more likely to give away personal details without knowing.

Mr Mallon commented:

“Be careful about what information you post online on social networks such as Facebook, don’t willingly give out banking or credit card details – particularly over the phone. Keep your passwords safe, and make sure your computer is up-to-date with the latest security software.”

In addition to this, the increasing use of online banking has also raised security concerns about personal details being exposed to credit card fraudsters. Consumers are being recommended to to check their balances on a regular basis to ensure they have not been hacked by cyber criminals.

Norton is recommending that consumers do not access their online bank account via unsecured wireless networks or public portals. The most recent Norton Cybercrime report has revealed that almost 60% of consumers in the UK have been affected by credit card fraud and identity theft.

Checking your credit score & keeping it high

Using credit checking agencies such as Equifax and Experian to check your credit report can help prevent you from getting into too much debt and helps to avoid being refused loans, credit or mortgages.

A credit report offers information regarding your personal credit history. It allows you to not only check credit defaults but also CCJs and bankruptcy against your name. It also allows you to find out which financial organisations have requested information on your credit score.

The likes of Equifax and Experian can now offer you the opportunity to check your credit history online and all relevant information is made available through third party financial institutions collaborating with the credit rating company.

It’s important to remember that keeping up with credit card and other debt repayments allow you to keep your credit rating high. The higher your score – the better rate of interest you can get.

What is a credit rating and how does it effect me?

Loosening credit criteria leads to increase in lending

Simplifying credit cards - bringing them back to basics with Creditwindow

Let’s bring the whole credit card concept back to basics…

Simply put – a credit card is a form of loan. The credit card company / bank basically provides you with the credit card sets a limit on the amount you can spend on the card – known as your credit limit.
The credit limit is based on your annual income and credit score. You are entitled to use as much or as little of the available amount as you wish. The credit card’s interest is charged on the amount you have used, not on the credit limit itself (unless you have borrowed right up to that limit).

Whilst you could simply apply for a credit card through your bank you can also apply for a credit card online, and a credit check will be carried out as part of the application process.

It’s worth remembering that when you use your credit card to purchase something or to take out a cash advance you are basically borrowing money from the credit card company. Just like an unsecured loan, you have to pay back any money you borrow back as well as pay the necessary interest and associated fees on the loan for the convenience of using the card and the benefits it offers.

Every month you will receive a credit card statement that shows you exactly what you have spent and where. The statement will also tell you how much you need to repay by the due-date. It’s worth bearing in mind that, although the statement will show you the minimum amount you need to repay, you do have the option of paying more and should repay back what you can, especially since this will help to improve your credit score.

You have a set period to make the necessary repayment on your credit card (usually two to three weeks). If you do choose to repay the outstanding amount in full, you will not accrue further interest on the amount you borrowed. Otherwise, you will be charged interest on the amount left unpaid, and that interest will appear on your next statement along with the unpaid balance and any additional purchases you have made on the card since the previous payment date. It can prove risky to allow your credit card to build up interest and you could end up paying back far more than you originally borrowed – this is why it is so important to stay on top of your credit card debt.

All credit card firms and banks have a duty to make their terms and conditions clear. It is extremely important to go over the small print before you commit to taking out a card.

Here at Creditwindow you will find a range of credit card providers and can click through to learn more about each one.

Could A Payday Loan Make Or Break Your Credit Rating?

Find out how a payday loan could help or hinder your credit score.

Did you know that a short term loan or payday loan could make or unmake your financial future? Well maybe not… but it could help.

It’s incredible when you think about it – did you know that a payday loan can actually benefit your credit score? Well… as long as you pay it back in time and don’t default on your payments.

Payday loans are useful if you need money quickly as you never really know when you might have a financial emergency and need cash fast.

The problem is – it’s not really your money, it’s the lender’s money and, like anything you are lent – you have to give it back. In the case of a loan – that’s paid back with interest. An important point but funnily enough it’s not something that’s touched upon by credit or loan companies enough.

I guess the real question you need to ask yourself before taking out a payday loan is – “can I pay it back?” If the answer is an unquestionable “yes” – then great, however, if it’s a maybe or a flat no then my advice is – really don’t risk it. the likelihood is you’ll just end up getting in debt and harming your credit rating even more than it already is.

If you harm your credit score you will only end up harming your chances of taking out a mortgage (if you want to buy a house) or getting credit for that car you want or, in some instances simply paying for your shopping with that credit card when you’re low on funds.

This author recommends that you sit down and have a long hard think before you make a decision on whether you should consider a short-term loan or not. You have to decide whether the risk is worth it or not – the lender can’t give you that advice.

Checking Your Credit Score and repairing your personal finances

With a poor economy and credit lending criteria becoming a lot more stringent it’s more essential than ever to stay on top of your personal finances. Checking your credit score on a regular basis is a good way of monitoring your financial health.

Credit card suppliers, mortgage companies and other lenders will usually run a credit check on you to determine your score and your credit history. This is to ensure that you are a reliable customer and will pay any form of lending back in a timely manner.

The higher your credit score is, the better the lending terms will be when borrowing money. However, if you have a poor credit score, it could result in you being unable to obtain any form of credit at all – or you may have to turn to a payday loan or guarantor loan.

Using credit rating companies such as Credit Expert (part of Experian) and QuickCreditScore to check your credit history and score could be the answer.

Using a credit scoring company will help you to check your history – showing you outstanding debts, CCJs, defaults and other things that could be blottting your credit score. It’s worth noting that obtaining your credit score can be free if you sign up for a 30 day trial with one of the agencies, after which you will be charged a monthly fee of around £5 – £7 to keep track of your credit history and score, or you can simply cancel the account after the 30 day period.

It’s important that you clear these as quickly as possible – especially if you want to be eligible to apply for a credit card or personal loan in the future.

Image: Michelle Meiklejohn / FreeDigitalPhotos.net

Are you looking for ways to improve your credit score - check out our top tips and make a start today!

Your credit score is the single most important element that almost all loan and credit card companies will turn to when determining whether or not to lend you money.

In addition to this a great credit score could mean the difference between a low interest rate (the interest incurred that you have to pay back on top of your loan) and your chances of getting approved for a loan or credit card at all!

Even if you are approved, with a poor credit score, you could end up paying out a huge amount of interest on top of the amount you’ve borrowed.

Check out our top tips to help improve or maintain your credit score:

1. Make credit card and loan repayments on time

This is probably the most important way of helping to improve your credit score. Payment history is the main factor that goes into determining your credit score.

2. Control your debt

Don’t get into more debt than you can afford to pay back and always ensure that you control your borrowing. If you already have outstanding debt then it’s imperative to make repaying this the number one priority and avoid all other debt if possible until this is paid off.

3. Control the balance on your credit card

It’s tempting to pay-out for everything on your credit card – don’t do it!

You have to remember that, just because you’ve got a £2,000 limit (for example), doesn’t mean you have to spend the full balance. It’s worth bearing in mind that you could well need this some day for some form of emergency such as urgent repairs or unexpected bills.

Apart from this it can also prove much harder to pay-off a larger balance quickly and may need to be spread over a period of time. This could be detrimental to your credit score.

4. Try to avoid applying for too many loans or credit cards in a short space of time

Each and every time you apply for a personal loan, credit card or mortgage this inquiry will show up on your credit score (usually Experian or Equifax). Unfortunately having too many inquiries on your credit history could have an adverse effect on your score and they will remain there for around 2 years. Since a single inquiry slightly affects your score just imagine what a number of them would do!

5. Talk to your lenders

If you’re really struggling to pay off your debt then talk to your lenders and arrange a payment schedule at a monthly amount that you can actually afford to pay back.

6. Avoid bankruptcy at all costs and consider consolidating your debt

Whilst filing for bankruptcy certainly appears to be the easiest solution to many people faced with large amounts of debt it’s not always the best route to take. Going down the bankrupt route is the single worst thing you could do to your credit score. Bankruptcy could result in an inability to borrow money for around 7 years. Any mortgage loan company, car financing firm or secured lenders will turn down an applicant with a bankruptcy listed on their credit report.

Consolidating multiple debts into one lump sum could be the solution to improving your credit history if your debt has grown to an uncontrollable level. This should really be seen as a last resort but is certainly something worth considering if you are really struggling.

Image: Pixomar / FreeDigitalPhotos.net

Credit Card Fraud Affects 13 Million Brits

A new study by life assistance company CPP has recently revealed that almost 13 million Brits have now been the victims of credit card and debit card fraud, in spite of a reduction in the number of people affected by fraud over 2010.

The research went on to show that 28% of respondents stated that their credit card or debit card had been used by fraudsters at some point in time, of which 7% had been victims over the last 12 months.

The study gathered information from well over 2,000 people, revealed the following:

1. One in five victims of credit/debit card fraud stated that the magnetic strip on their card had been cloned at and ATM machine or through a chip and pin device.

2. A further one in five victims stated that cyber criminals had obtained card details via the internet.

3. Perhaps most shocking of all was that a third of respondents did not even realise that their credit card or debit card details had even been compromised, many of whom did not even realise that they had been fraud victims until contacted by the bank or their card was refused.

The most significant revelation of the report showed that many people were failing to take simple measures to protect themselves, with 17% stating that they did not shield their fingers when typing in their pin. A further 18% said that they never check an ATM to ensure that it hadn’t been tampered with before use.

Despite this bad news the number of consumers affected over last year was down by 3% on 2009, the previous year. Commenting on the drop, Sarah Blaney, card fraud expert with CPP, stated:

“This in itself is good news and shows how progress is being made to reduce the number of victims. In particular, online fraud has decreased, which could be a result of industry initiatives such as Verified by Visa and MasterCard SecureCode.”

Ms Blaney added that card fraud is “costing the UK £440 million a year” and that“consumers still need to remain vigilant and not let their guard down.”

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