Desperately seeking payday
22 January 2008
Brits urged to check credit report before applying for credit
While the majority of Brits will be receiving their first much-needed paycheck of 2008 on Friday 25 January, the five week wait combined with the excesses of Christmas will have proven too much for many of the 500,000 Brits who will take out a personal loan in January (1).
As the credit squeeze tightens and debts deepen around the country, Callcredit is exploding the myths about credit reports - one of the tools used by lenders to determine whether to lend to money and at what interest rate.
Many people are nervous about checking their credit report, some think that it's costly and complex and others simply don't see the need. But checking your credit report is part of a healthy financial lifestyle - it's an essential step towards taking control of your finances, it ensures you get the best possible deal for you and is just as easy as accessing your bank account online.
Top five myths - busted
The credit myth The credit truth
I don't need to check my credit report Checking your credit report means that you understand how lenders view your financial status and allows you to check for any fraudulent activity.
A relative with a bad credit history can negatively affect my score Unless you have a joint account, loan or mortgage with that person (i.e. to financially connect you), your credit score is not affected by any relative.
A house can be blacklisted as having a bad credit history Blacklists don't exist. Lenders can only carry out credit checks on people, not on an address. So any previous people at your address shouldn't affect your credit score.
Using price comparison sites will affect my credit rating Price comparison sites do not undertake credit checks. Your credit report is only checked by a lender once you have entered the application process.
If one lender rejects my application I won't be able to get credit anywhere Different lenders have lending different criteria. However you should avoid making too many applications for credit in a short space of time as this can put lenders off
Owen Roberts, head of Callcredit Consumer says:
"Credit reports are important in all our lives but a lot of myths have built up over time. Your credit report is an essential tool in managing your finances - the better you understand it the more in control you will be."
(1) According to www.fool.co.uk
• Callcredit (www.callcredit.co.uk) is the UK's most innovative, state-of-the art credit reference agency, with an extensive range of information and value added services for businesses and individuals.
• Callcredit consumer provides consumers with online access to the details of their credit file at http://www.mycallcredit.com/
• Callcredit has harnessed state-of-the-art information technology with an unrivalled knowledge of the industry's needs to develop a range of innovative information solutions. Solutions that are enabling major lenders and a host of other blue chip companies to address regulatory requirements, make better credit decisions, target new customers more effectively and manage existing customers more profitably.
• Callcredit is one of six core businesses that form the Skipton
Information Group. The other five are:
• Database management company EuroDirect
• Market analysis firm GMAP Consulting
• Online payment service provider, Legatio
• Scorecard development and affordability assessment specialist DecisionMetrics
• Marketing services and database specialist, Broadsystem