What things damage my credit rating?

To many people working out whether they are a good credit or a bad credit seems like a black art. Though they may feel they have been an upstanding, law-abiding citizen they are sometimes surprised to find out they have been declined for credit and wonder what they have done to damage their rating. While each loan company has its own scoring system and they keep them private, the purpose of this article to is point out some general things that can impact your credit rating. Let's start with some of the obvious things:

• You've been made bankrupt in the past: this will take about 6 years to be removed from your credit history, even after you have been successfully discharged
• You are or have been in an IVA/Trustdeed: Again, it's a 6 year potential horizon on this
• You've had some CCJs: Once again, even if you clear them successfully, a record of them remains on file for up to 6 years. Not all lenders will count them this far back but some can and will
• You have some current arrears: Whether it's a mortgage payment (this one is considered the most serious), credit card bill, mobile phone or other utility bill, if you have some current arrears that are yet to be cleared, this will show up on a credit search and likely dissuade Lenders from extending more credit to you.

Most people who are aware that they have one or more of the above issues on their credit file won't be too surprised to learn it affects their ability to get a loan but there are also some you may not have considered:

• You're not on the Electoral register: This is often perceived by Lenders as a sign of instability and a reason to decline and application
• You have a high level on unused credit: It raises questions if you have many credit cards that you don't use.
• You have made many applications in quick succession: This can come across as desperate and is viewed with suspicion. We encourage clients to limit their applications and not to make them too frequently.
• You have a bad financial association: You can be associated with someone with whom you have taken credit with in the past e.g. a former partner or family member. If they get into trouble with their payments, this can reflect on you
• You have been late making payments in the past: It may seem like an innocent thing to forget but if you were late making your mortgage/credit card/gas bill etc. payment last year, this may well be flagged on your record. In an age where lenders need little excuse to decline a loan application, this matters. We recommend direct debit payments where possible to prevent this happening.
• You have been a victim of identity fraud: Sadly, the incidence of credit being taken out without the Borrowers knowledge, while still rare, is on the rise.

The only way to check if you have been affected by these issues is to check you credit repot. We recommend you use the 30 day free trial at Experian. For any help with Debt management issues we can arrange for a Debt management professional to call you without obligation to discuss your situation. Call us on 0845 1260350