Good credit, bad credit

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A question I have to ask when I see clients for the first time is ‘Have you had bad credit, such as late payments, county court judgements or even bankruptcy?’

 

With the type of market we are in at the moment having bad credit makes getting a mortgage or any type of credit difficult to obtain.

 

It’s often not a bad as you think late payments or missed payments can be a problem, but if they’re not recent transactions and you’ve demonstrated a good record for a good period of time, then you should find that you’ll be ok.

 

If you’re really concerned with your credit record its worth going on line to a credit agency such as Experian or Equifax to obtain your credit report. This will let you know how good your credit is and all your transactions. It can also show you where you’ve defaulted on payments.

 

If you’ve had instances where you haven’t had the funds to pay your direct debits because your not sure when they’re due to come out, it’s probably best to have all your direct debits coming out a day or so after your paid so that you know that your bills a re paid and what is left is yours. This way you don’t spend the money due for your bills and in turn default on paying the bills. Once you start to get a good record of paying on time you’ll start to see your credit rating improve.

 

One last thing, when applying for a mortgage it’s best to see somebody who will look at the whole of the mortgage market.  

I look at all the lenders and find the right one for you, which means I only carry out one credit check or agreement in principle as they like to call it.

If you go to several lenders and have a credit check done at every bank or building society then it could have an adverse effect on your credit. This is because it looks like your applying for lots of credit in a short space of time. Due to the data protection act the lenders won’t be able to see if you have been agreed or declined and after a few checks will decide that their must be a problem or you wouldn’t be applying for so much credit in such a short space of time. 

Be careful that you don’t have too many agreements in principles as it could be detrimental to you in the long run.

 

ian.minns@imyourfa.co.uk - 07810 872634 Please feel free to email or call me with any financial questions you have. I do not charge a fee for my advice and it is strictly confidential

 

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