Understanding Your Credit Rating

A lender is not under any obligation to approve credit for you or to give you a loan. When you apply for credit, lenders look at many different factors in order to determine if you are a good risk to repay. It is important to have an income and you will have to supply proof of being employed. In addition to assessing your income and your existing payments, lenders also look at your credit rating. This alone is weighted heavily in the approval or denial of credit. Read more

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Debt consolidation ‘an option’ for those in debt

People who are looking for a way to deal with their debt may want to consider debt consolidation, Experian has said.

James Jones, consumer education manager at the company, advised people who are struggling with their finances to seek advice from a free advice agency, citizen’s advice bureaus or the national debt line.

“Debt consolidation is one of a range of options,” Mr Jones commented.

“I would encourage people to always speak to their lenders if they are struggling to make payments,” he added, saying that they can help people find solutions to their debt problems.

According to research from CreditExpert.co.uk, 20 per cent of people plan their finances every six months or less.

Commenting on this, Mr Jones recommended that people get into the habit of doing this every month or every three months.

The research also found that one in ten of people are completely clueless about their level of debt.

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Applications for credit reports rise as customers are refused loans

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.

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