FNTN

Introduction.

The markets are up, the markets are down, the banks are happy and making profits, the banks are losing money again – quite what the state of the economy is for the average person in the street is, to say the least highly confusing. However, and sadly, the one recurring issues that we keep hearing and reading about is how the banks and finance companies are all making it more and more difficult to borrow money, seizing on any minor reason they can find to refuse loans which is why you need to pay due attention to your personal credit score vigilance.

Lender paranoia.

Checking your credit history online is both quick and simple.

 Overall, if we are to believe what we’re told about the banks, they are starting to return to profit and do have the funds to make loans. However, a worrying trend at present is that unless you can somehow offer them a gilt level of ability to repay a loan – they will simply refuse your loan application. A major factor that they will look at when considering your loan application is, of course, your credit history and your current credit score. Whilst it would be difficult to put a number on a cut-off point in your credit score below which you won’t get a loan, even having had a poor credit history in the past could affect your chances of a loan now. Indeed the odd indiscretion in your credit history of say a single missed payment, that might well have made no difference at all to your credit rating twelve months ago, could well today debar you from getting even a small loan! Quite rightly this situation is leaving some people desperate to borrow money quite distraught. It is bad enough being refused a loan if you have a genuine blot on your credit history or if through some genuine reason you did miss a repayment on a previous loan. But, the worrying part of this story is that people are being refused loans due to errors on their credit history’s, leading to poor credit scores.

Check your credit history.

No matter how good your credit score - check the history too.

 Whatever the reason for you missing a repayment on a previous loan which might be because you moved home, were ill, were away on vacation or just simply forgot; I’m afraid you can expect no concessions from a bank that you request a loan from. Unless they believe you have an unblemished credit history they may well refuse your loan application. It could even have a knock on effect to any borrowing you do with your credit cards, with the credit card company reducing the spending limit on the credit card. Companies that might not previously have run credit checks before approving loans are now doing so, so it is in your own best interest to check your credit history and insist that any mistakes are corrected. Don’t presume your credit history is OK. Even if you’ve always paid your bills or loans in full and on time, mistakes can still creep onto your credit history and cause you problems. A typical example could be an agreement you take out for say a cell phone. Having agreed to a twelve month contract in the cooling off period you change your mind and cancel it. The problem is that the cell phone company might not bother to inform their credit agency that you’ve cancelled the contract, meanwhile according to the credit agency you’re running up a monthly debt! Without checking your credit history you’ll never know this. The cell phone company aren’t actually chasing you for any money so you presume all is OK, but the credit company thinks otherwise! As if that wouldn’t be bad enough, the cell phones credit agency then lets all the other credit agencies know about this mythical debt – and before you know it you can’t get a loan anywhere. Along the same lines checking your credit record is a useful way of establishing if you’ve been the victim of identity theft or fraud.

What do lenders look for in your credit history?

Sensible use of credit cards can actually help you to get a personal loan.

 It’s not just your raw credit score that the banks and lending companies look at. They will also consider your current level of indebtedness and how well you are currently repaying other loans, which will include looking at what credit cards, store cards, mortgages, other loans etc you already have. Even if your current credit score is quite good, you should be aware that past credit histories will also come into play. Expect anything going back up to five or six years to be of interest to someone considering offering you a loan. They will also check back with how long you’ve lived at your present address and your previous addresses in the last five to ten years. Perhaps not before time, after years of seemingly being a source of endless hassle free loans, credit card companies seem to be taking a more proactive interest in credit records. Apparently the various credit card companies are also starting to share customer data as to their user’s credit card activities. Looking at who pays on time, what you use your cards for, do you only repay the minimum etc. All of which will be useful to the credit card companies if you apply for a card with another company; which is, of course, another reason for checking your credit score and history yourself. However, again it’s not just people who have issues with blemishes on their credit cards that need to worry about what their credit history is saying. Even if you never get into debt with your credit cards, but do always take advantage of all the offers they send out so you pay little or no interest – it could still result in you having difficulty getting a loan. The irony here being that the credit companies can turn round and say they can’t assess your credit worthiness as you’ve never had debts to pay off. It really is a case of – heads they win, tails they win!