The Top 5 Credit Rating Killers
Essentially, every lender will have their own criteria and score applications from prospective clients in their own way. This will be based on the type of services on offer and other variables but there are also some fixed factors which will have an impact your credit rating. Your compliance with these will determine whether your application is accepted or declined. So, it’s lucky that Debtsolver are on hand to guide you through these five potential stumbling blocks. Obviously, debt can be dangerous if not properly managed and the effect that a bad credit rating can have on your ability, not only to borrow money, but also to secure an overdraft facility, a credit card or even a mobile phone contract.
- You should be registered on the electoral roll at the address provided on your loan application. Lenders like to see a bit of stability. If you’ve been at the same address for 3 years or more, you get a better score. If you’ve had a couple of addresses in the last 3 years, it doesn’t look good but if you’re the homeowner it’s not too big a deal. Any more than that looks really bad. Those that rent are therefore most likely to be affected by this.
- Lenders look for employment continuity too. The longer you’ve been in your job, the better your score. Changing jobs for a bigger salary shouldn’t be a problem but you should really have been in your new job for a few months before applying for credit. You’ll probably need to show the last couple of months pay slips. Too many jobs in too little time and bouts of unemployment will have an effect on your score.
- Your credit history roughly accounts for 35% of your credit score. Missed or late payments will be a factor but their effect diminishes gradually over time, as opposed to negative entries, which stay on your credit report for 6 years. However, if you have been making payments on time for at least the last 12 months in service of those negative entries, they will begin to have less influence on your score.
- You’ll get maximum points if you’ve been with the same bank for a long time too. You’re credit score will be affected if you’ve only recently opened your current account but not nearly as much as not having one. The financial continuity of a stable current account is important but no bank account at all will be heavily detrimental to your credit rating.
- Remember, every time that you go for a quote or make any application for credit, the lender will perform a search and this search leaves a trace which is recorded on your credit report. Too many of these in a limited period will start to have an effect on your credit rating. This is being investigated as it doesn’t promote shopping around for the best deal on your loan but for the time being, you should bear it in mind. Some feel that it points to someone who’s desperately trying to obtain credit; desperation is not an attractive quality to lenders. If you’ve recently made a number of applications which have been declined, take a break and try not to make any more for six months or so. If your financial situation requires instant credit, you need to get sound financial advice and fast.
Visit www.debtsolver.co.uk for more information on the debt solutions that could be best suited to your circumstances.
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