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).
If you have recently moved to the UK, or moved back after a spell abroad, you may be wondering what you can do to start to grow your Experian Credit Score.
You may even be looking to spread your wings and move abroad, and wondering how this will impact your score.
Due to the differences in data protection laws between countries we are some way off having a “global” credit score, we at Experian in the UK only hold information relating to individuals at UK addresses and so moving to or from a new country will mean starting your credit history afresh.
We’ve put together some tips on what you can do to get started on building your credit history.
If you’re…..moving to the UK for the first time
Firstly, you will need to start building your credit history. For those that have moved from another EU country, then the first step to take would be to register on the electoral roll.
EU citizens can vote in EU elections, and registering at your current address on the voters roll will help when you apply for credit, as lenders often use this to help confirm the ID of their applicant. You can find out more about registering to vote at www.aboutmyvote.co.uk
If you are not able to register to on the electoral roll, you can add a note to your credit report (once you have obtained a copy of your credit report) to explain this, called a Notice Of Correction.
Many banks now share information relating to current accounts with overdrafts, so speaking to your bank about such an account could be the next step towards building up your credit history.
As your accounts become more established, lenders will be able to use the information to help make their lending decisions.
If you’re…..moving back to the UK We hold information on closed accounts for six years, so when moving back from a spell abroad there may still be information on your credit report, depending on how long you have been away.
To check for any old information, make sure you supply your old UK address in your application when it asks for a previous address.
If you’re …..moving to another country from the UK ~
As information on your UK credit report is for use within the UK only, we can’t supply your UK credit report to any countries outside of the UK.
If you are moving abroad, you may want to get a copy of your credit report to take with you when you go. This way you would be able to provide a potential lender with your UK credit report yourself should they wish to see it.
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. For more information on how to improve your Experian Credit Score, here are our top 5 tips.
Getting a good understanding of the factors that do and don’t affect credit ratings can help you both now, and in the future.
Experian research found that seven out of 10 of Britons (71%) believe they have a good or excellent history of managing credit*.
But two thirds of these (66%), equivalent to almost half the UK population** have never actually checked their credit report or score – and should their credit rating be damaged, it could get in the way of their chances of getting the most suitable deals, and at the best rates.
So that’s why we’ve now launched a series of online guides to help take some of the mystery out of the credit referencing process, and help people take control of their finances.
Could your credit history prevent you from getting a mortgage?
Experian research suggests that more than a quarter of people in the UK looking to buy their first home before 2016 – around 1.81 million people – have missed credit repayments, defaulted accounts and CCJs currently listed on their credit report. And all of these could prevent them from securing a mortgage.
My partner has a poor credit score due to falling behind on credit card payments when he was out of a job and the account had defaulted. We are currently trying to find a mortgage but because of this we cannot seem to get one. Would paying the remainder of the account in full help with his credit and possibly be accepted for a mortgage?
Your credit score is not set in stone – you can change it
Everyone has a credit report, and by definition a credit score too. And when you apply for new credit, most lenders want to make sure you’re able to pay it back before they commit to giving you credit.
Moreover, more than half those with money worries said their financial situation gives them sleepless nights. Many also thought the stress has been affecting their relationships and their health. Just 6.5 per cent of borrowers were unconcerned about what they owed.
It’s important that your credit reportincludes your electoral roll details because lenders use this information to help confirm your name, address and residential history.
Not being registered could therefore cause a delay when you apply for credit, while the lenders confirm your details some other way. With some lenders it can even hurt your credit score, and some applications may even be refused.
Banks and building societies usually need to know that the information about you is up to date before they are willing to offer a mortgage, a loan or any other form of financial account. Maintaining your presence on the electoral roll is therefore particularly important.
If you are unsure whether you are registered or not, or would like to register for the first time, you could visit the About My Vote website, type in your home postcode and complete your local authority’s form.