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The top ten credit myths – and the truth behind them
1. Previous occupants of my address affect my credit rating – Nope, as long as you didn’t share a financial connection
2. Credit reference agencies help make lending decisions – Nope (and yep), they only hold your credit report but this info is used by lenders to help them make the decision
3. Past debts don’t count (some people do believe this) – Nope, they do, and some stay on your record for at least six years. Even a missed payment stays on for at least 3 years.
4. If you’ve never borrowed, you’ll get the best deals – Nope, lenders prefer to see that you can manage debt and make regular, full repayment of all your personal loans.
5. I could be on a credit blacklist – Nope, they don’t exist. Credit reports do not take account of race, religion, gender or where you live. But they obviously do indicate your creditworthiness but each case is individual and there is no blacklist.
6. Friends and family living at my home affect my credit rating – Nope, unless you share a financial connection with them
7. Repaying your credit cards in full depresses your credit score – Nope, quite the opposite. Late and missed payments do the damage.
8. It doesn’t matter how many credit accounts you have – Nope, it does. If it looks as if you’re trying to borrow a lot in a short period of time, lenders may think you’re desperate for money or even suspect fraud.
9. You only have one credit score – Nope , each lender uses a different system for judging your creditworthiness.
10. Items in your credit history stay on file forever – Nope, most information about your credit history is held for between three and six years.
December 30, 2008 at 3:08 pm | Loans General Info | No comment
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