Getting better information on credit in current economic and financial climate
The global financial crisis and recession has had a profound impact on the lives of many people in terms of finances, and one of the areas that has been deeply affected by the economic and financial climate over the past couple of years is the financial sector. Read more
Tags: debt, Credit score, personal finance, finance, Credit history
Applications for credit reports rise as customers are refused loans
April 18, 2008 by admin
Filed under News, News-Credit-Cards
Twice as many customers are applying for credit reports as six months ago in an effort to understand why they are being refused credit on loans, credit cards and mortgages, according to Experian, the UK’s biggest credit scoring company.
Consumers are becoming increasingly “proactive” in their approach to their finances as they try to maintain a good credit history.
James Taylor from Experian told Fairinvestment.co.uk that “up to 20 per cent of people now check their credit report before applying for credit”, with the majority making use of the internet to do so.
UK consumers’ personal debt now stands at £1.4 trillion, yet many people are ignoring the credit crisis and continuing to acquire more debt as they spend more than they can afford, according to research by CreditExpert.co.uk.
With lenders restricting their criteria, consumers are advised to regularly check their credit reports to help them stay on top of their finances.
Credit crunch makes it ‘harder’ for UK consumers to get cards at low-rates
March 21, 2008 by admin
Filed under News, News-Credit-Cards
UK consumers are “finding it harder” to get credit cards with low rates of interest due to the credit crunch, one financial expert has claimed. 
Credit Action said that credit is not as widely available as it was 12 months ago and in those places where credit can be found, it is often more expensive.
Chris Tapp, director of Credit Action, said: “So credit cards and all kinds of credit have become a less widely available and a more expensive option for borrowing than they were in the recent past.”
However, he added that the popularity of credit cards is still enduring and they are not about to go away as they are now a “very normalised part” of the way that people manage and borrow their money.
Recent research from MoneyExpert.com released at the beginning of the month shows that 3.2 million of us own five or more credit cards and 28 per cent of us applied for more plastic last year.
The news comes despite mounting concern about debt problems as the credit crunch hits home.
Credit checks toughen up
November 13, 2007 by admin
Filed under News, News-Loans
The days of cheap credit seem well and truly over – for now at least – as lenders get tough in the light of global financial chaos. 
The credit crunch is beginning to bite, with more and more lenders getting tougher with credit checks, new research has found.
Signing up for a new mobile phone, credit card or hire-purchase agreement can often require a credit check, and a growing number of shoppers are being turned down, according to Equifax.
“We have already heard how high street lenders are cutting credit limits and putting up interest rates, but this also applies to the smaller credit lenders,” spokesman Neil Munroe told the Independent on Sunday.
Recent research has shown that personal loans are getting harder to come by, with many providers simply abandoning the market.
“Credit providers use a ‘credit scoring’ system based on an individual’s credit history to calculate risk and to decide whether to lend,” agreed James Jones of Experian.
“They are now only granting credit to those with the best scores.”
Even catalogue purchases are being affected, Mr Munroe noted.
He warned: “In the past, they might have overlooked the odd missed payment here and there, but we are now finding that slight misdemeanours on your credit file can matter a lot more.”
Bad Credit-Credit Cards
November 3, 2006 by admin
Filed under Credit Cards
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In the red and on the blacklist
What is bad credit, how do you become somebody who has bad credit and how does it affect your daily life? How do you get a credit card even if you are on the credit blacklist? There are ways and means…
The cost of credit repair
If you are refused a mortgage, a loan or even a credit card it may be that you are regarded as either a bad risk or that the lender can’t see how they will make money from you, which, when it comes down to it, is the same thing.
But I haven’t done anything!
When you apply for any kind of loan the company you are approaching conducts what is called a credit check. Every time you have enquired about finance it has been recorded on a central database and lenders access this database to see how well you repaid your loans and any other debt management you have exercised.
If you have missed a few payments on a loan, defaulted on a mortgage for whatever reason, or perhaps failed to pay household bills on time, it will be recorded and quite often the criteria lenders use to assess whether you are a good or bad risk will count these things against you.
Squeaky clean
Strangely enough even if you have lived a squeaky clean financial existence and never had a credit card or defaulted on any payments or perhaps you haven’t had a large repayment to make before, this can all sometimes add up to an equally bad risk in the lenders assessment. This is because they have no data on which to assess you; there will be no record of how you may respond to the credit you are now applying for. So they refuse you credit altogether.
A quarter of adults
It’s reckoned that one in four adults have had some form of bad credit rating at some point in their lives. The good news is it can be changed. One way of changing your credit rating for the better is with a bad credit-credit card.
How much!
The problem with bad credit-credit cards is they tend to be expensive. The APR you will normally find on these cards can be up around 30percent.
But as you are determined to improve your credit rating and this is why you have taken out one of these cards it doesn’t really matter because you will be paying off the full balance each month and thereby avoid actually paying the high interest rate…won’t you?
Shop around
It is always worth shopping around for the lowest rate you can get, just in case there is a month or two where you simply can’t pay everything off. And above all, don’t overstretch yourself! Just because you have credit doesn’t mean you have to use it!
Keeping it real and avoiding the debt trap
Once you have your card it is really important to make sure you use it properly. If necessary you should set up direct debits from your bank account well before the payment due date so you always pay off at least the minimum payment each month.
The secret to improving your credit rating is to make regular payments and thereby demonstrate your reliability. But remember, paying off the minimum each month will incur compound interest, (interest on interest) at very high rates too. The last thing you want is to fall into the debt trap.
A capital card
The Capital One Classic Credit Card is currently available to people who have a bad credit rating. As you might expect, it has a limited credit ceiling of between £200 and £2,500, but with time it is likely to increase as you demonstrate good management of your debts. The APR is a whacking 29.9% so you really want to avoid paying interest if you possibly can.
Hopefully a card like this would help you walk away from being amongst this country’s one in four with a poor credit rating.
More Information:
- Credit card articles – some great articles from the Card Guide
- Applying For Credit Cards When You Have Bad Credit
- Using Your Credit Card To Build Credit History
- CCCS – Free non profit association advice
- APACS information page
Credit Card Balance Transfer Guide
November 3, 2006 by admin
Filed under Credit Cards
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A frequent mistake by many credit card holders is to run up a balance, which for one reason or another simply can’t be paid back in one go, so it starts incurring interest. And those interest payments can be crippling.
It’s no wonder the British public have been playing ‘hot potato’ with their credit cards; swapping balances here, there and everywhere. But this has its advantages and disadvantages.
Here’s a short guide to balance transfers.
Running up that bill
It’s very easy to run up a balance that sits like a lead weight on the statement every month. As soon as it’s there even the smallest change in interest rate could make quite a difference to your monthly outgoings.
So shop around!
Be brave, be bolshy!
If you have a fairly large balance and you’re feeling brave, it’s worth phoning the credit card company. When you get through, instead of dealing with the person at the call centre, ask to speak to somebody in the department who sets the interest rates.
All these companies are interested in getting your business and somebody, somewhere sets the rates they offer. Play one company off against another. Tell them what other companies have offered you and ask the question: can you go lower?
The chances are they probably will.
Choosing a credit card
Given that you are going to be getting your new credit card account with an opening balance on it you should probably go for the one offering the cheapest APR. That is not necessarily the one offering zero percent incentive for a few months. You need to be aware of what the APR will revert to when the offer period ends. If you decide to change to another credit card company at that time you may get a transfer fee levied at you and it can affect your credit rating if you change credit cards a lot.
It’s certainly not worth going with a credit card that charges you an annual fee – Why pay them twice! There are plenty of cards that don’t charge out there.
New doesn’t always mean better
Remember the golden rule, when you get that new card, don’t use it for anything else.
The chances are that if you do use it then on your next statement you will get two sets of interest and that second interest figure will be at a much higher rate than for the balance transfer. You’ve no excuse for being surprised, as it will all have been itemised in the small print of the terms and conditions…
Money down the drain
So as you pay your monthly fee into the account it will be deducted from the part of the account that is paying the least interest, not from the transaction that was incurred most recently. In which case, all your hard work researching and selecting the card in the first instance would have been wasted by a single slip up.
If you think you might be tempted like this, the answer is to leave your new card in a drawer where it’s out of harms way!
Credit, credit, credit: your rating
Frequently swapping your balance around from one credit card company to another can sometimes adversely affect your credit rating. Your credit rating is the information the lender companies use to decide how much credit they are going to give you.
The one who cannot be named
If every time you change cards you regularly clear the balance within the interest free period then the lending companies will start to see the game you are playing and can refuse to give you credit.
This is then reflected on your credit rating which means that other companies are even less likely to loan you money. From that point on it can be a downward spiral into credit rating hell.
Refuse me?!
In the UK there are two major credit checking companies that lenders use to check your credit worthiness. These are Experian and Equifax. Both these companies hold your credit history and you are entitled to see that information.
Stand and deliver
If you are refused a credit card it will be worth contacting the lender within twenty eight days of being refused to find out which of the two above agencies were used to provide your credit history.
Remember that you will have been refused credit by the company you approached for the credit card, not by Experian or Equifax; however, talking to them will allow you to see what’s on your record and then get an idea of why you were refused credit. In some circumstances you might even be able to reverse the decision.
Get out while you’re ahead
Assuming you did get the credit card you wanted and you have been given a good long introductory offer with low interest on the outstanding balance, how do you make the most of it?
The answer is simply to keep a record somewhere of when the offer expires. If you keep a diary, scribble it in there, or in your palm pilot, or in your desktop organiser – it doesn’t matter where, just keep a note somewhere obvious.
Have we been here before?
With the end of the introductory period written down you can then make an informed choice of whether to transfer to another card or not. With your new-found understanding of the credit rating system you could get hold of your credit rating and base you decision whether to move or not on that.
Whatever your decision your main aim should always be to prevent your credit card bill becoming overwhelming by accruing huge amounts of compound interest each month.
Tags: conditions… money, equifax, Credit score, opening balance, Credit card