Tag Archives: credit rating

Applying For Credit – A Few Tips

Applying For Credit - A Few Tips

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.

Related articles:

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

Loosening credit criteria leads to increase in lending

Debt Management Plans – what are they and how can they help me?

Have you run up large debts on your credit cards or borrowed where you should have saved? This is a familiar story for many people, especially at the moment in the current economic climate.

A Debt Management Plan (DMP) is a common method used in the UK for paying-off personal loans and credit card debt. Usually these types of debt have spiraled out of control or are too big to manage yourself. A DMP can be setup between the debtor and an intermediary to help re-negotiate interest rates and re-payments with the lenders in an attempt to make the debt more manageable.

The intermediary, commonly known as a Debt Advisory Service, should recognise that it is important to suggest that the individual pays only what they can realistically afford after their priority expenses, such as mortgage payments, rent, food and utilities, have been paid before any money is taken by the Creditors (the lender / credit card company).

If you are struggling with managing personal debt and it is proving more than you can handle it is certainly worth speaking to Debt Management experts to find out what can be done to control it.

Related articles:

Debt Management

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

A credit rating is a score based on a statistical analysis of an individual’s credit file and represents the “creditworthiness” of the person in question.

A credit rating is based on a credit report, sourced from credit bureaus such as Experian and Equifax.

Lending firms, such as credit card companies and banks, use credit ratings to evaluate the possible risk posed by lending money to consumers and to mitifate losses due to bad debt.

Loan companies and banks use credit ratings to determine whether or not the individual qualifies for a loan and the interest rate they would be entitled to.

A credit rating can also be used to help lenders identify which customers are more likely to bring in the most revenue. Using credit scoring before authorising access or granting credit is a widely accepted, trusted system.

If you are struggling to obtain credit it’s certainly worth remembering that there are a various number of options available to you.

It can prove difficult to obtain credit if your score is poor which is why products such as pre-paid cards, payday loans and logbook loans have come about as they do not rely on the customer having a good credit rating.

Credit Cards – Back To Basics

Credit Cards – Back To Basics

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?

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.

A Quick Guide To Personal Loans

A Quick Guide To Personal Loans - unsecured loans, secured loans and guarantor loans.

A Quick Guide To Personal Loans - find out more about unsecured, secured and guarantor loans.

Unlike payday loans, personal loans are larger sums of money that you borrow over a long period of time.

The interest costs for personal loans can vary from lender to lender and will depend on whether the loan is secured or unsecured.

What is a Secured Loan?

A secured loan is a loan that is secured against an asset, such as your car or even home. If you are unable to repay the loan, the lender can sell your asset as a way of getting it’s money back. Whilst the APR interest rate on a secured loan tends to be less there could be additional fees and charges.

What is an Unsecured Loan?

Unlike a secured loan, an unsecured loan does not need an asset to guarantee the loan against. However, like any form of borrowing, you will need to repay the loan in full. If you fail to repay it the lender could take legal action against you in order to get its money back. It’s vital that you repay an unsecured loan in full as, if you default, your credit score could be severely damaged – meaning that you could be barred from taking out credit cards or personal loans for a number of years.

However, there are alternatives to unsecured loans, such as guarantor loans.

The only difference with guarantor loans is that they are secured against the word of a “guarantor” (a person who promises to repay the loan on behalf of the borrower). Whilst this tends to be a good form of borrowing, if neither you or your guarantor are unable to repay the loan then there could be serious implications.

In spite of the obvious advantages and disadvantages of each form of borrowing mentioned here, the main advantage is the positive affect they could have on your credit score if you repay them in a timely manner.

As a consumer you have a duty to protect your own interests and understanding the benefits of pitfalls of different types of lending is a significant step in the right direction.

To find out more about borrowing money and finding the right product for you, check out our other financial guides:

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.”

Homeowners Turn to Credit Cards to Re-Pay Mortgage

More and more people are turning to their credit cards to help pay their monthly mortgage rates or rent.

The report by housing charity, Shelter, has indicated that the number of consumers paying for rent and mortgages with credit cards have increased by around 50% in a year.

More than 2.5 million people have been forced to resort to borrowing money to keep a roof over their head over the last 12 months. The report also suggests that these figures are up from 4% when the same research was carried out back in November 2009.

The Shelter charity are concerned that this could lead to many families being pushed into spiralling debt, eviction or repossession, leading to homelessness.

The charity’s Chief Executive, Campbell Robb, commented:

“Using credit cards to pay the rent or mortgage is simply robbing Peter to pay Paul. With the average credit card interest rate now standing at over 16% it is the worst possible course of action.”

Mr Robb went on to add:

“Already someone faces the nightmare of losing their home every two minutes, and we would urge every single one of these people now relying on credit to keep their home to seek advice urgently.”