Tag Archives: Experian

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

How could joint finances affect your credit rating?

Share a credit account? Then you share credit report information too.  Sharing finances can mean you’re more linked than you think, as lenders will often look at both of your credit reports when assessing your credit. 

If and when you apply for credit together, lenders will be able to see your partner’s financial information too and may use this when they make a decision about you when you next apply for credit. So we’ve put some tips to help you get up to speed with shared finances and credit.

Five top things you need to know about love and money

social-valentines-campaign_ce-blog_300x200_6

  • Financial association means that your credit report can become linked to someone else’s through joint financial activity. This could be applying for a mortgage, opening a joint credit account, or in some cases even being on the same broadband or utility contract.

 

social-valentines-campaign_ce-blog_300x200_2

  • Your credit report will only contain your financial information, but will show the name of anyone you share a financial connection with. If you share a credit application, each of you would see the other’s name in the section of your Experian Credit Report entitled ‘Financial Associations’.

Continue reading

How could recent inflation rises affect us?

Small changes to the things we do on a regular basis can help cut down costs Did you know inflation in the UK reached a two-year high in December 2016? We look at how this could affect all of us.

With the weaker pound pushing up air fares and food prices, the cost of weekly shopping and jaunts abroad is on the up, not matter what your budget.

The  Office For National Statistics estimates that a basket of goods and services that cost £100 in December 2015 would have cost £101.60 in December 2016.  They put the rise down to “Price movements for the majority of the broad groups of goods and services.”

*Did you know: the most recent figures show that in 2014 the average food shop was £58.80, which would have meant an extra 50p a week in 2016 with these rises.* Continue reading

What you need to know about credit builder cards

For those who maybe haven’t got the credit history they’d like to have, the options for credit cards may be fewer.

But there are credit cards around which are aimed at helping you get your credit history back on track.

How do they work?

These no-frills cards are aimed at people who need to help build their credit history.  They often have low credit limits to start with and a high APR, but paying off the bill each month can help show lenders that you’re reliable.  Applying for too many cards at once can hurt your credit score even more, so it’s an idea to choose a credit card you’re more likely to get, and one that suits your needs best.

Continue reading

New Year financial goals: 5 tips for making and keeping them

The monthly financesNow is a good a time as any to clear out your financial clutter, especially with – for many – January’s salary feeling a long way off after the festive blowout.

So to get 2017 off to a bright new start and set yourself some achievable financial goals, we’ve got 5 simple tips.

1.    Check out your ins and outs  Even small changes can help you balancing your income against your outgoings, which can often help you feel more in control of your finances.

It can help you work out when to allow room for certain annual essentials, for example direct debits like a TV licence, one-off annual charges like home or car insurance, or things like birthdays or special events – as well as stopping outgoings you may no longer need or use, like a gym membership you forgot you had.

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

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!

Continue reading

7 ways to handle the Cost Of Christmas

friends-shopping-xmas-300“Christmas is a-coming, the geese are getting fat…” goes the old festive rhyme. The one thing that probably isn’t getting fat when it comes to Christmas, however, is your wallet. 

Last year it was expected that households would spend, on average £796 on Christmas – with £596 going on gifts, £159 on food and drink and £41 on cards, trees and decorations.

Read more
: Black Friday – what’s all that about?

Depending on the size of your family and friends, and on how generous you are, it’s quite possible that you spend more than this every Christmas. And this doesn’t even take into account the cost of going out, and the endless round of parties. Continue reading