Tag Archives: credit

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

Credit card jargon buster – 10 top terms

Credit cardsEver wondered what some of the key credit card terms really mean? Here are our top ten.

  1. APR - The annual percentage rate is the price you pay each year for money you’ve borrowed, including interest and fees.  The representative APR is an advertised rate that a minimum percentage of customers will pay, usually 51% of those accepted.  If you’re not given the advertised rate, you’ll get a personal APR.
  2. Balance Transfer – This is when you choose to move credit card debt you already have to a lower or  0% interest credit card balance, usually for a transfer fee.  With a 0% balance transfer deal you can potentially give yourself longer to pay off an existing credit card debt, without having to pay interest. This is as long as you make the minimum monthly payment and stick to any other Ts and Cs. More about balance transfer cards here
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How well do you know yourself?

How well do you know yourself? We decided to try and find out, one day last month in Nottingham.

And it turns out that while there’s a lot we do know about ourselves, one thing not many of us know is our credit score.

We set up a booth where people could pop in and answer some simple questions in our quiz – but one question above all foxed them.  Watch the video to find out how and why!

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Graduate debt on the rise: 5 tips for new students

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).

And how you manage any credit you have now can affect your chance of getting credit in the future.

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Ask James: credit questions answered

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

Jack from Cheadle wanted to know if claiming benefits would affect his credit rating, and would be part of a future credit check.

James from Worthing wants to know why his Experian Credit Score has gone down when nothing has changed with his financial profile, while Susan from Bury St Edmunds asked Why can’t the pre-app checker identify me?, about not being found on a credit card eligibility calculator.

Finally, Diana from Exeter would like to know why she was unable to change her gas meter from pay as you go to direct debit,

You can also find more Ask James questions answered in our Ask James archive.

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 contact us – find all the ways you can contact us here.

 

PayPlan Q and A – with James Jones

*COMPETITION NOW CLOSED*

payplan-JJ-image-500Got any credit-related questions you’d like answered? We’re joining forces with PayPlan for a Twitter question-and-answer session on Friday (17th April) between 12:30-1.30pm.

It’s your chance to ask our Experian Expert James Jones any credit questions that you have! You can submit questions to him @PayPlan in advance or ask questions to James directly during the hour.

You could also win a £25 Argos voucher in PayPlan’s competition if you submit a credit-related question – you can find details and full terms & conditions HERE. Make sure you mention @PayPlan and use #AskJames.

PayPlan is a provider of free debt management plans , IVAs, and free debt advice, Here’s Darren from Experian Experts with a guest blog on how to rebuild your credit rating when coming out of debt.

 

5 good reasons to register to vote on the electoral roll

Being able to vote could potentially help you get credit

Being able to vote could potentially help you get credit

With the general election just months away, the leading names are jostling for position as they covet our votes.

But many of us won’t even be able to vote in it, unless we get on the electoral roll – and not doing so could also affect your credit rating.

Today (5th February) is National Voter Registration Day, a day that marks the anniversary of the Great Reform Act in 1832 which first introduced voter registration. The aim for this day is to get 250,000 more young people on to the electoral register, as young people are very much under-represented at present.
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6 online Christmas shopping tips

Are you doing your festive shopping online?

Are you doing your festive shopping online?

Managing your finances at Christmas can be tough, especially when there’s a lot to pay for, and a lot of time to fill. So if you’re planning on doing your festive shopping online, we’ve come up with some key tips that might help.

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Get credit-set for a summer of football

Brazil World Cup 2014

A summer of football, sunshine…and not much work done?

There are fewer than 100 days now until 12 June, which sees the opening match of this summer’s FIFA World Cup in Brazil.

Excited? I certainly am. I’ve been to a major tournament myself, and can vouch for how amazing it feels to be part of the action.  And it’s not too late to think about travelling out to Brazil to take part in the festivities.

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