This week’s blog is all about credit!
I’ve had a couple of cases this week which involved credit issues of various kinds.
Although your credit rating may be good, it’s worth checking what your existing credit balances are. In other words, check what your available credit is.
If you have credit cards, you will be told what the available credit is on your monthly statement. If you are almost at the capacity of available credit on your cards, even though you may have made payments on time, this may affect your ability to take out additional credit.
Late payments are not good! Make sure you pay at least the minimum payment required each month. On time! Your statement will specify the date by which you need to make the payment and also what the minimum payment is.
If you feel you are being charged unfairly for something you may feel justified not to make the payment.
However, be aware that the provider may present you with a default which will appear on your credit report. Even if you pay the bill after the default has been received, your credit report will show that it had been ‘satisfied’.
Lenders will have their own views on satisfied defaults. They normally expect satisfied defaults to have been satisfied for a specific period of time.
The length of time since the default was received can be a factor (even if it has been satisfied).
Whether or not the default has been satisfied will be a factor. Even if it was received years ago, if it hasn’t been satisfied it will still show on your credit report that you owe the money.
The amount of the default can also affect the decision. The higher the amount the worse the effect.
A default on a mobile phone bill or utility account will still appear on your credit report.
If your mobile phone bill includes the payment for the handset, it may appear on your credit report as a loan.
A late payment will appear as a late payment. The reason for the late payment is not specified on your credit report.
Late payments on a mortgage are late payments on a loan secured against a property. Failure to make the repayments on a mortgage could result in the property being repossessed.
Late payments because you forgot to make the payment is not ‘preferable’ to missing the payment because you didn’t have the money to pay it. In fact, it might indicate a failure to manage your finances.
My top tips:
- Be aware of the credit you have available and the level of that available credit being used.
- Get a copy of your credit report before you apply for a mortgage.
- Know what loans, credit cards and hire purchase agreements you have.
- Know what the monthly repayments are.
- Set up the minimum payment to your credit card(s) each month.
- Make sure you have enough money to pay your mortgage payments each month.
- Ensure you’re registered at your current address on the electoral role.
- Don’t change your bank account and stop any standing orders/direct debits until you know they have been transferred to your new account.
- If you have adverse credit wrongly applied, query it and appeal it. Keep any written evidence of the reversal such as letters or emails. It may take a few weeks for any change to your credit report to be applied.
- To check your credit, you could use Equifax, Clearscore or Experian.
An article from Martin’s Money Saving Tips explains Experian will help tenants’ rental payments to be recorded on their credit file, in association with Rental Exchange. Read the article HERE*.
Any questions? Give me a shout!
Your home may be at risk if you fail to keep up the repayments on your mortgage.
*By clicking on the links you are departing from the regulatory site of Swift Mortgages. Neither Swift Mortgages nor Quilter is responsible for the accuracy of the information contained within the linked site.
Tel: 07903 302895