Credit report tips offered by site

17/03/2009

Simply putting your name on the electoral roll can help boost credit ratings, according to a financial website.

Moneysupermarket.com released its "top tips" study yesterday, showing that financial firms are likely to reject customers applying for cards and loans automatically if they are not registered to vote.

Other ways of improving credit scores cited in the report include getting a mobile phone contract and taking out any sort of credit card.

However, Moneysupermarket.com warned that the ratings will only be made better if the customer manages these contracts carefully and always pays debts off in full.

Customers with a high credit score are able to receive preferential rates on mortgage loans and other forms of borrowing.

In turn, this makes it less likely that they will struggle to repay and fall into debt.

Kevin Still, EuroDebt director, commented: "It should be remembered that credit ratings and credit scores are generally calculated by the lender using credit reference agency information as a one of several sources of information. The lenders' own policies and previous experience of you as a client play a major role in what constitutes an attractive client for them. Shopping around for credit can result in a number of credit searches appearing on your credit file with the respective credit reference agency used by each lender. These searches can imply "credit hunger" and be used in the rating or scoring process, usually with the effect of reducing your rating or score. It is sensible to apply for your credit file and determine what type of lender that you are likely to be attractive to."

He added: "EuroDebt deals with people that are already in financial difficulty and are probably at or over their credit limit. We would always recommend that consumers take a responsible attitude to their debts and don't try and borrow their way out of debt. Setting up a reasonable payment arrangement or Debt Management Plan with your creditors will be reflected on your credit file, which demonstrates that you have taken a responsible attitude to your debts, but are unable to meet contractual payments. In many instances it is preferable that your accounts are shown as in "default" where you can only make token payments so that the detrimental information is deleted from your credit file after six years from the default status appearing on your file with Callcredit, Equifax or Experian. If you have to downsize to generate more disposable income then definitely notify lenders of your new address and put yourself on the Electoral Register if you are likely to responsibly seek credit in the future."

Figures from the site suggest that rates offered by personal loan lenders to customers with a low credit score can be three times larger (eight per cent compared with 24 per cent) than for those with a high score.

Tags; Debt Management and Banking, Credit Card Lifestyle,

• Share
• 
• 
• Store
• 
• Follow
•