A new world of university life is shortly set to open up for thousands of teenagers.
Most new students realise they’ll leave university with a loan they’ll spend years having to pay back once they’ve made it into the world of work.
But new research shows that new graduates will face average debt levels over a third of the average outstanding mortgage.
By the time they start paying back their loans – maintenance and tuition fees – their debts will be well in excess of £41,000, according to The Money Charity, which is 35% of the average outstanding mortgage (£117,162).
The Experian Credit Score is a guide to help you understand your credit report, and how the way you’ve managed the credit you’ve had in the past might affect applications you’re making now.
It can also help you keep an eye on your progress while you maintain or improve your credit score before you apply – and here are our five top tips to help you do that.
Tip 1 – Stay within credit limits and keep balances low – The lower your overall balances (not including mortgage), the better. If you can afford to pay off a bit more debt and you want to improve your Experian Credit Score, reducing the balance on your credit cards and overdraft can be useful. Close unused credit accounts if you don’t use them anymore, as lenders can take into account the credit limits available to you, not just what you owe at the moment.
Tip 2 – Try not to make too many applications in a short space of time – A scattergun approach to making credit applications, even if you see it as just shopping around, can have a negative impact on your Experian Credit Score. Each application is recorded on your credit report and if lenders see lots in a short period, they could think that you’re desperate for credit or suspect fraud.
Tip 3 – Set up direct debit payments to make sure credit bills are paid on time – Missed or late payments stay on your credit report for at least six years, and this can have a big impact on your score. Regular payments on time can help build up a good credit account payment history.
Tip 4 – Register to vote at your current address - Lenders use the electoral register to help confirm who you are and where you live.
Tip 5 – Review your credit report regularly - Make sure it’s up to date, and that the information on it is accurate. If you do find anything that needs correcting, contact the relevant lender and ask for an amendment – Experian can also raise a query on your behalf. Even small details like the way your name and address is recorded could have a significant impact.Also check your financial associations with other people.