As the recession affects the UK, there is more and more emphasis made on the need for a clean credit score. As the best method of curing is always prevention, the first step in maintaining a clean credit score will always include prevention measures to prevent your score from being jacked through the roof. Nowadays, you need a clean credit score for almost any financial venture such as:
- Mortgage loans
- Car loans
- Credit cards
- Bank accounts (even when not overdraft accounts)
The worst part is that now employment is starting to depend on a credit score which is increasing the need for a clean credit rating.
Know your Postal Code impact
Well, the first thing to know is that you credit score is effected by everything you do and everywhere you go. Your postal code can mean more than you ever thought. When you move to a poorer neighbourhood surrounded by neighbors that have defaulted on loans and credit cards, you will subsequently get a lower rating. Sounds a bit harsh, but this is how credit companies and lenders are beginning to protect themselves. Their general motto is that you are who you associate with and if you live around credit defaulting less affluent individuals, you will be placed in that category.
Renting verses owning makes a difference
Not only where you live but how you live in your home is also having a negative effect on your credit rating. If you own your home, you are generally more apt to having a higher credit rating than if you rent. Bias as it may be, many financial institutions are considering renting as a sign of low funds and less credible than those who own their own home. Seems redundant a bit that if you want to own your own home your tenancy will decrease your credit score making it harder to get the mortgage loan you need to purchase your own home, but this is the result of a recession that has seriously affected financial institutions everywhere.
Where Can You Find Your Report
There are three major credit report reference agencies in Britain from most influential to least:
- Experian
- Equifax
- Callcredit
Access Your Report Regularly
Each of these credit agencies keeps their own profile on your credit and any recent activity. Checking these reports is necessary each year to maintain your credit rating. Although you will find that these agencies are offering memberships to their site for unlimited access year long for around £ 6.99/year, you will find that getting the basic £ 2 report will keep you on top of your credit score. Use of these reports can allow you to see what is lowering your score or what is increasing your score, but you generally want to keep as high of a rating as possible.
Be careful what financial actions you make. The following are financial factors that will influence your credit score negatively:
- Applying for credit cards
- Applying for financial loans
- Applying for bank accounts
- Applying for long-term contracts (e.g. mobile phone)
When applying or receiving quotes, you want to make sure that you request the companies note on your file that the inquiries were a “quotation search”. The more inquiries you make, the more suspicious the credit agencies will become concerning your credit so making sure you do some research before applying and limit your applying is very essential to preventing your score from plummeting. When you receive any type of these services you applied for, you want to make sure you keep up the payments at all costs. Even if you are broke after paying, it is a small price to pay to keep your credit score from decreasing due to default or missed payments. Any defaults actually remain on your credit for 6 years no matter what payments you make to put the account back in good standing.
