Credit rating. The holy grail when it comes to finance. So how do you ensure that a good credit rating stays with you? What tips are there that you can continuously follow to ensure you stay out of trouble.
Not many people know for instance that just checking on whether you have a good credit history could impact on that very credit score. A lot of people before they apply for a mortgage or a loan, will check online to see if they have a good chance of getting approved before going through the actual process. Checking too many times, though, could mark a good credit score. There are things such as hard searches and soft searches. If you want an idea as to whether you will be approved without making a dent on your score a soft search should be done. Many banks such as NatWest provide an ‘approval indicator’ which allows people to check on their current rating without anything harming a credit score – this is an example of a soft search. If you go direct to a lender they will do a hard search and that will be on your credit history so make sure you are pretty sure you will be getting a yes from your lender before you actually make an application.
Another scenario that may startle a few people is the fact that, even if you have the capability to maximise your credit availability, you shouldn’t. Regardless of whether you never miss a repayment and have never failed to pay on time, stretching your credit limit every single month isn’t looked upon very well. So be careful that you don’t push yourself too much every month. As always, everything in moderation and you will be fine.
Staying with the theme of making payments, it comes as no surprise that if you fail to make a repayment when you are expected to, your credit rating will be soured. But did you know that just one repayment slip-up will stay with you for six years. A six-year black mark could cause a grave amount of problems -so ensure you can afford to meet all payment deadlines all the time.
Our last little bit of advice is something that probably doesn’t affect most people but it’s worthwhile noting anyway.
You have to be on the electoral roll – if you’re not, it opens up questions on the fraud front. If you ’re on the electoral roll lenders can verify that the information you have given is true and correct.
And that’s that really. Common sense stuff. Don’t spend what you can’t afford and then you won’t get into trouble.