Tag Archives: credit report

Understanding why you were refused credit

The monthly financesIt can be a real pain when you make an unsuccessful credit application, especially when you can’t see why you were refused.

“But I’ve got a good credit score!”, “But I pay all my bills on time!”, “But I don’t even have a credit card!”, people may say.

When you apply for a credit card, a loan or even a mobile phone contract, it’s up to the lender to decide whether or not to lend to you – and they have varying methods to work out if you’re a risk worth taking.

New research from Experian* has found that 86% of Brits think that lenders should share information on the reasons why they have been refused credit.  If you’ve been turned down, only the lender can tell you why because only they know. If you ask, they should be able to give you the main reason.

Does being refused credit affect your credit score?

Experian’s research also found that 75% of the population think that being refused credit affects your credit score.

Being refused for credit is not, in itself, hazardous for your credit score. While your credit report will show that you applied for a credit card – it stays on for a year –  it won’t actually show whether or not you were accepted.

However, credit refusal can often lead to more attempts to get credit – and making a lot of applications in a short space of time could have a serious impact on your credit score, and your ability to get credit in the future.

That’s one reason why Experian have partnered with Credit Strategy for 2017 Credit Awareness Week, in which the aim is to empower people to improve their financial future.

Some common reasons to be refused credit:

  • You’ve missed or made late credit payments recently, which show up on your credit report
  • You’ve had a default or a CCJ in the past six years, which will show up on your credit report
  • You’ve made too many credit applications in a short space of time in the past six months
  • There are mistakes such as incorrect addresses or other errors on your application form
  • You may not fall into the target bracket for the type of credit you’ve applied for

Understanding the impact of your credit report

Did you know that 61% of homeowners have never checked their credit report? Your credit report is a summary of credit accounts you’ve had in the past six years – and that can include not only credit cards, loans and mortgages but also overdrafts, mobile phone contracts and certain utilities such as gas, electricity and water.

Lenders use it to take note of your repayment records and how well you’re coping with your finances, and use it, along with the info on your application form and info they might already have if you’re an existing customer, to help them make their lending decision.

In our survey, only 56% identified the lender as the one who makes the final decision for a credit card, with loan (61%) and mortgage (67%) not far ahead.

Interestingly, 76% said they would like to see more information on what they can do in the future to ensure they don’t get refused credit again.  Understanding how your credit report works could help you understand the reasons why you may have been refused credit – and help you manage your finances better in the future.

Understanding your credit score

We also found that the young don’t check their credit score. 85% of Brits aged 18-24 don’t know what their current credit score is, and almost three-quarters (73%) have never checked their credit score.

Your Experian Credit Score tells you how lenders may view you, which is useful when you apply for credit – and is FREE FOREVER. The higher your credit score, the more chance of being accepted for credit, at the best rates.

* Conducted by YouGov on behalf of CFA, 10th – 13th March 2017

Would a missed gym membership payment affect my credit report?

Gym membership and your credit reportIt’s no surprise that gym memberships rocket in January. Resolutions to shed the pounds in the new year are not uncommon, and gyms and fitness centres know full well that a high number of new members will find it hard to keep up their commitment beyond the end of the month, let alone the full year.

Even with introductory offers, gym membership can still be costly if you’re committed for a year upfront and are loathe to cancel.

Spending some time balancing out your income against your outgoings can be beneficial in the long run, and can also make you feel like you’re in control of your finances.  And the start of the year is often a good time to think about if there are any costs you can do without – outgoings you may no longer need or use.   

Besides gym membership, it might be satellite TV channels you never watch.  An extended warranty you didn’t really need to buy. It can all add up! A budget calculator may help you work out if you could live without it.

Would a missed gym membership payment affect my credit report?

Neil Stone from our Social support team says:  We’ve recently been contacted by a worried customer who was being chased by a debt collection agency over a missed gym membership payment and were concerned that it would impact their credit report. Continue reading

How to stay credit-savvy in the new year sales

Christmas shoppingWhen it’s time for the New Year sales, shops and suppliers are extra keen for our custom.

And there could be some room for a bit of give and take, with shops probably having plentiful stock to shift in the face of the boom in online discounts.

There isn’t much that cannot be discounted, so it’s up to you to persuade them to do it. Remember that you have nothing to lose, as all retailers ultimately want your custom.

Four quick haggling tips:

  1. Before you venture into a shop, find out what the best price is online so you can ask the seller to match or better it.  Doing your homework could help you get in a position where you can negotiate a happy middle ground. Continue reading

I keep getting mail for someone who doesn’t live at my address

By Neil Stone, Social Media Executive

man receives bad news in the post.Post in other people’s names
It’s great to come home and find letters waiting for you on your doorstep but when the letters turn out to be for a previous resident or even someone that has never lived at your address it can be frustrating. If it’s a demand for payment it can also be understandably worrying.

The good news is that as long as you have no financial connection to the individual (such as joint account) then their information will not affect your credit report in anyway.

This is because all credit checks are done by name, and not address, so lenders won’t see or use information relating to the other person when checking your report.

The best thing to do is to return the letter unopened to the sender clearly marked as “not at this address”. The lender should then look for their customer elsewhere.

Sadly we can’t prevent a person from using an address to apply for credit, or stop lenders from contacting their customers at an address, but by regularly returning the post the lender will stop trying to contact them. Continue reading

Does financial responsibility make someone more attractive?

scales-image-300x200The summer months are often when love can bloom as people enjoy the sun and fun. People pair up with each other for all sorts of reasons, but is it true that one of the biggest is the way they manage their finances?

Well, could it be that most women prefer a man who’s responsible with money to a George Clooney lookalike with a degree?

A nationwide Experian survey of couples in relationships in 2014* asked if financial responsibility would make someone more attractive. 29% in total said it would, while 35% of women said this would make a male ‘much more attractive’.

However, 3 in 4 of women (75%) said they rated financial prudence more attractive than appearance, education or background, and on a par with intelligence (74%).*

Continue reading

Why do I keep failing my security check with my bank?

Dear James,

When my bank asks me security questions I always fail, even though I know what they say about me is incorrect. When I dispute this they advise me the information comes from my credit report. The information on my credit report is clearly incorrect. How can I get access to it and correct any errors? 

Adrian, London

 

Dear Adrian,

Sorry to hear you’re having problems confirming your identity with your bank. It’s important for banks and lenders to take steps to verify your details when you get in touch to help keep your money and details safe.

When you first open an account it is quite common for companies to carry out quite rigorous checks which can include asking questions based on the contents of your credit report held by one of the three credit reference agencies. Now if, as you suggest, questions and answers based on your credit report suggest there may be some incorrect information held about you it would be a good idea to order a copy of your report from the agency in question and check it through very carefully. If you do this and spot any discrepancies you can ask the agency to help you put this right.

It’s important for the information on your credit report to be accurate and up to date. The easiest way to check your report is online, where you’ll find more information about your options including obtaining a copy of your £2 statutory credit report.  Read more about correcting any mistakes on your credit report in this previous Ask James question.

Once you’ve opened an account with a bank or lender, for example, you usually set up some personal security details, such as a username, password, memorable word and PIN. If you’ve done this and are having problems accessing the account its best you contact the bank’s customer support team for advice as I’m sure they’ll be able to help.

Get tips on keeping your money and details secure when your online from the identity protection area of our website (April 2016)

James Jones Signature

To see the latest questions answered by James, visit our Ask James Q and A section on the blog.

Planning for your long-term financial future

The Queen turns 90 this week – happy birthday ma’am! She may be just a decade short of getting a card from, um, herself (!), but she’s clearly in no hurry to retire just yet. 

Twitter poll – what age do you plan to retire?  

It’s never easy to know how much you’ll need to have set aside for your retirement. So it can be useful to think ahead and start planning for the long-term financial future.

How much might you need?
Everyone’s circumstances are different of course, but some factors can be common. If you’ve paid off your mortgage, that would free up a large part of your outgoings. However, if you are helping to fund your children in their quest for homes/studies/weddings etc, then that can push costs right back up.

Continue reading

Ask James: latest credit questions answered here

Every month Experian’s James Jones answers a selection of your questions about credit and fraud in his ‘ask the experts’ style column here.

Among the new questions, there is Should a default still be showing on my credit report?, about an old default that was due to disappear.

There is also a query about car finance and credit scoring,  Will voluntary termination of car finance affect my credit score?, and another relating to a debt relief order, Why is my debt relief order still affecting my credit rating?.

You can also find archived Ask James questions arranged under subject headings such as ‘applying for credit’, ‘credit and debt’ and ‘fraud’ at the main Ask James page.

If you have a specific question and can’t find an answer here or you wish to contact us to query something on your credit report, please use our customer service contact form.

Watch James talk to Experian Experts blogger Darren about retirement and your credit report.

Can I remove a CCJ that’s been added in error?

Dear James,

Can a CCJ be removed that was caused by a car insurance company in error? They’ve accepted liability, so what are the next steps?

Dean, Castleford

Dear Dean,

You certainly can apply to have a court judgment removed from your credit report if it relates to a successful car insurance claim. To get your Experian Credit Report updated please obtain a letter from your insurance company confirming they accepted liability for the claim and, importantly, quoting:

  • The value of the judgment
  • The date of the judgment
  • The case number
  • The court where it was entered

Then pop this in the post to us at Experian, PO Box 7710, Nottingham, NG80 7WE and we’ll remove it from your credit report and send you confirmation. Don’t forget to quote your Experian credit report reference number. You’ll need to contact the other credit reference agencies too, to make sure they update the reports they hold for you.  (March 2016)

You can find archived Ask James questions arranged under subject headings such as ‘applying for credit’, ‘credit and debt’ and ‘fraud’ at the main Ask James page.