Rescue your credit rating: Let finance expert Martine Lewis help dig you out…
According to Martin Lewis of moneysavingexpert.com, “credit rating blacklists are a myth.” Even so, banks, lenders and HP monkeys have access to stacks of information about you – all of which will affect whether they lend you cash. So these eight tips could prove invaluable.
1/ Check your credit history – now
“There are three things they get information from when you apply for credit,” says Martin. “Your application form, your past dealings with that company and your credit reference agency files.” Two quid to Experian, Equifax or Callcredit will let you see what these dreaded files say about you, although Martin reveals a loophole to see your files for free on his website. Check there are no mistakes. If there are, call the agency and insist they’re removed.
2/ Check out your missus
Whining for a joint account, is she? Only agree if a) she earns more than you and b) she has a good credit history. Because if she’s late with her payments, she’ll drag your credit score down into the gutter and you’ll find yourself at the local pawnshop, Xbox in hand, next time the gas bill comes.
3/ Apply… with care
You don’t get a good credit history unless you have credit. Choose a place that’s likely to say “yes” – every time you’re rejected, it registers on your record for all future lenders to see. Tip: being employed, on the electoral roll and having a landline at home all help.
4/ Spend and pay
Next, use your new credit card – every month if you can. But make sure you never, ever miss a repayment. Regular payments, made on time, is the fastest way to improve your financial “reputation”.
5/ Get more cards
But not too many. Having too many lowers the amount others will be prepared to lend you if and when you really need it.
6/ Stay in debt
A good bank customer is one who always owes them money, but never misses a payment. Think of credit card fees as membership subscriptions to a vast cash-lending society. That seven quid in interest you lose every month keeps you in the VIP room – making bigger amounts available to you when needed.
7/ Be patient
If you’re really screwed, take whatever crummy rate you can, use the card, meet your payment deadlines and wait. 18 months from now they’ll let you have a proper card that doesn’t have the word “loser” printed on it, sweet 7% deals will be yours, and you can go back to step 5.
8/ Kill, smoke and shag with impunity
And finally some good news: among the things they don’t see are criminal records, medical histories or the fact that the Child Support Agency thinks you’re scum because you “forgot” Junior’s upkeep last year. Student loans also don’t count, unless you have a County Court Judgement against you for non-payment.