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Posts Tagged ‘credit score quiz’

With banks and lenders being very selective on who they are willing to current lend to, the importance of a good credit score is ever more important.
From a mortgage, credit card, secured/unsecured loan or some sort of purchase that requires credit or even a cellular phone contract, the information held on your credit file will used to consider if your application is accepted.

For people with less perfect credit scores or limited credit history such as new graduates, then there are ways to help improve the rating and increase your chances of a loan or credit card.

1. Have you registered to vote?

Many companies use the electoral roll to verify individuals and to confirm identity. Ensure you are registered to vote at your current address.

2. Do you have any current credit?

Banks and lenders look at credit history when considering applications, therefore, having prior or current credit will be looked at more positively than someone who has never had a loan or mortgage, as there is no proof the individual is capable of keeping up their loan repayments.

Competitive credit card deals are not normally available, unless you have a blemish free credit rating. However, taking on an uncompetitive card to build your credit history, may be an option if looking at the longer term. So as long as you clear your monthly balance, then there will not be any interest charge – so in theory a quick and easy way to build credit history for a future larger loan.

3. Ensure your credit score is accurate

If you have difficulty with loan applications or purchases that require a good credit rating, then you should check if your credit details are correct. You can contact a credit reference agency to check for any inaccuracies.

4. County Court Judgements (CCJs) or bankruptcies

For any settled CCJs or elapsed bankruptcies, then make sure it is recorded correctly on your credit rating as these will affect your credit score adversely.

5. Resist trying to make multiple loan applications if you are rejected by one lender

Each time you make an application for a loan, the lender will search your credit file and this will leave a residual ‘footprint’ for future lenders to see. More than one application over a short time frame, could have a negative impact to your credit score.

6. Change of personal circumstances

If your circumstances change, then you can place a Notice of Correction on your credit file, explaining the background if you run into any arrears on a repayment of a loan. A lender will review this when assessing any credit applications in future, so this will help validate any problems you were experiencing previously.

7. Try to avoid maxing out your credit card limit

Avoid spending over 30% of your credit card limit. If you frequently reach this limit, then it may be viewed negatively by lenders.

Missing monthly credit card payments is detrimental to your credit rating, make sure you setup a direct debit or standing order to avoid late payment fees as well as negative credit ratings.

8. Shut down unused bank accounts or credit cards

Make sure you close down any accounts or credit cards that are not used as this is used by lenders to consider potential debt liability.

9. Early settlement

Trying to make early payments on loans or credit cards will be looked at favorably by other lenders.

10. Additional items

The length of time in the country as well as income proof and employment status are other major factors on credit scores.

11. Credit Score Quiz

Take the credit score test to see how banks and lenders may consider your credit rating:

A. Registered to vote at your current address? YES = 10 OR NO = 0
B. Have at least two active credit accounts? YES = 10 OR NO = 0
C. Credit account payments up to date? YES=15,  NO=0
D. Missed any payments on your credit accounts in the last 2 years? YES=0, NO=10
E. Any County Court Judgments or bankruptcies? YES = 0 OR NO = 25
F. Defaulted on a credit agreement before? YES = 0 OR NO = 25
G. More than two applications of credit in the last six months? YES = 0 OR NO = 5

Scorecard

90-100 – Excellent candidate for credit
70-89 – Good chance of being granted credit
50-69 – Fair – may have some problems obtaining credit
0-49 – Poor – will find difficulties in obtaining credit

Alan Parker is a Finance professional with over 10 years of experience in helping people with loan options as well as providing advice on maintaining and building individual net wealth.

To learn more, visit my web page, unsecured loans for bad credit to get help and read about what options are available to you.