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Borrowing is so much a part of 21st Century life that being refused a loan, credit card or mortgage can come as a shock,
especially if your finances are well under control. Take this quiz to discover if there could be a nasty shock in store for you.
Q1) Your attitude to borrowing is:
a) I don't like being in debt - unless it's essential, I don't borrow
b) Of course I have some debts - I couldn't own a car or house without help
c) I need to borrow if I'm going to have a decent lifestyle
Q2) Your credit record:
a) Must be OK - I got a new credit card only last month
b) Should be fine - I don’t have any financial problems
c) Will reflect the fact that I repay what I owe
Q3) When you're looking for new credit:
a) I research all the deals, so I know what I want before I apply
b) I contact lenders and ask them to give me further information
c) I fire off applications when I see an attractive offer in the media
Q4) Your
credit history shows:
a) No problems - I've never been in any trouble
b) A few missed repayments years ago but everything is up to date now
c) I was made bankrupt five years ago but I’ve since been discharged
Q5) You regard registering to vote as:
a) My duty and right - people died to ensure we can have our say
b) Something I must get round to updating - I'm still registered at my old address
c) Pointless - nothing really changes, whoever is in power
Mostly A's
On the surface, you seem like the perfect prospect for a lender. But because you have so little
credit history, lenders may be
cautious. If you have no track record, they cannot tell how you might behave in future and might not lend to you because
they have inadequate evidence that you'll manage credit well.
Look at your credit report to see how much history you've managed to build up and, when you do apply for credit, explain
your circumstances to the lender. For example, you could tell them that you have repaid your mortgage or use a debit card
because you live within your means.
Mostly B's
On the surface, everything looks OK but there are a few things you should do. Check your credit report to ensure that those
requests to lenders for information haven’t been interpreted as credit applications, leaving searches that are now on your
credit report. These credit applications could worry lenders into thinking that you are desperate for money or even that an
identity fraud is being planned, so contact the lenders who made the searches and ask for them to be removed if you were
genuinely asking for a quote only and didn’t make an application for credit. And next time, be sure to ask for a quotation
search, which won't damage your credit rating. Quotation searches and unrecorded enquiries will be shown on your credit
report but will not be seen by lenders.
The second thing you should do is update your electoral registration. Lenders use the electoral roll to help them confirm that
you live at your address and to check that you are who you say you are. If the current address you give in an application
doesn’t match the one on the electoral roll, they’ll probably need to make further enquiries. They might even decide to
refuse your application.
Mostly C's
You're a big borrower who is coping well, but lenders might limit the amount of new credit they make available to you in
order to make sure you do not take on too much debt. Even though you’ve been discharged, that bankruptcy will still be on
your credit report – it stays on the record for at six years. Lenders may be cautious because they fear you will not honour
your obligations to them either.
Don't panic - if there was a good reason why you got into difficulties (redundancy or family problems) but all is well now
you can explain this by adding a note to your credit report. Lenders should look at your note before making a decision. Look
carefully at your credit report and make sure that everything accurately reflects your circumstances.
(Disclaimer: All information is copyright Experian, and used by Identity Alarm with expressed permission)
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