We won’t have cheap credit for ‘a number of years to come’

According to a financial analyst, Brits will not be seeing the days of cheap credit “for a number of years to come”.

Darren Cook, a spokesperson for Moneyfacts.co.uk, said that some experts have predicted the Bank of England base rate will increase another three times before the end of the year.

“These uncertainties, paired with the house price adjustments and many households finding themselves in negative equity, [means] lenders are prudently hedging themselves on pricing due to fears of a massive increase in the probability of default,” Mr Cook commented.

In related news, Experian recently advised consumers looking to secure a loan to check their credit report first.

By doing so, consumer education manager at the organisation James Jones said that consumers give themselves a better chance of their loan application being accepted as they can make sure that the information on their report is correct before it is checked by a lender.

Tags: England base rate, James Jones, bank of england, personal finance, Brits, loan, Darren Cook

Credit checks toughen up

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.”

Tags: Business Finance, credit scoring, individual, scores."Even catalogue purchases, smaller credit lenders, James Jones, Credit score

Being added to electoral roll boosts credit rating, expert says

Performing simple tasks such as registering to vote for elections can boost customers’ credit scores, a financial expert said today.

Financial services advisors Experian recommended that customers add themselves to electoral rolls, so that companies can more easily verify their identity.

Consumer affairs manager James Jones said that being added to the roll particularly when you move is important, because “lenders use [the information] to check your name and address”.

“It will affect your credit score if you’re not on there,” he claimed.

Mr Jones offered more general advice to prospective credit card holders saying that “it’s a good idea, for a start, to actually look at your credit score and make sure it’s accurate and up to date and that you’re happy with it.

“Just use credit wisely”, he counselled. “Make at least the minimum repayments on your credits every month so that you don’t have any arrears recorded on your credit report.”

According to statistics from Checkmyfile, 1.6 million Britons are not currently registered on electoral rolls.

Tags: Credit report monitoring, TransUnion, use, credit rating, Credit card holders, James Jones, finance