• Credit Scoring

    Are There Easy Ways to Improve my Credit Score?

    If you keep getting turned down for things because your credit check is not turning out well, then you may wonder what you can do. Well it is possible to change your credit record so that it is more favourable. This will allow you to have access to those things which at the moment you are getting turned down for. There are different things that you can try.

    It is wort noting though that different lenders will look for different things. This means that there is no fixed way that you should be changing things that will work for every lender. For example, some will like to see that you have missed a few repayments on something as they will feel that you will miss a few on theirs and they will be able to profit from that. However, others would rather see a completely clean record where you can prove that you can be trusted to cover every repayment. However, if you have never had any debt then you cannot prove that you are capable of repaying it, so this may go against you. There are a few things that you can try though which will hopefully improve the credit record in the eyes of most lenders.

    Check your record is correct

    The first thing to do is to make sure that your credit record is correct. Some people find that there are mistakes on theirs. It might be that it shows debts outstanding that have been repaid or just has information on there that is not right at all. You will be able to look at your credit report for free. Looking at it will not show up so you will not make any difference to it by just checking that it is correct. You can also inform the company that you are using to view it that the information on it is incorrect. However, it can be better to refer to the lender or company that has the incorrect information to inform them that it is incorrect and to ask them to change it.

    Keep on top of repayments and bills

    Regular bill payments and debts will appear on your credit report. If you can keep on top of them and make sure that you never miss a repayment then this will show that you are capable of making repayments on any loan that you are applying for. It can be best to set up direct debits to do this and then you will never forget to do it and so there is less risk.

    Pay off outstanding debts

    If you have lots of outstanding debt then this does not look good to potential lenders. Therefore, make sure that you do your best to repay debt if you can. If you have a selection of small debts then it should not be too difficult to repay them one at a time. This will not only show that you are capable of repaying debt but it will also mean you have less debt and therefore less to have to pay out on interest and repayments meaning you will be more able to afford another loan.

    Do not apply for lots of loans

    Lenders do not like it if you are applying or lots of loans. Each application will show up on your credit report whether it is turned down or accepted. Applying for lots of money looks like you are desperate which make it seem like you will not have enough to cover repayments. Also, if you get turned down a lot, it will look like lenders feel that you are too risky to lend to. Other lenders will see this and start to feel the same way as well.

    Have a decent salary

    Lenders will want to make sure that you will be capable of repaying a loan. Obviously, your salary has a big part in this and the higher it is, the more capable they will think you will be at repaying the loan. Therefore, make sure that you get a salary as high as you can so that they can trust you more. They will also be more likely to trust someone that has a salary form employment rather than form self-employment as they would see that as a more secure income.

    Conclusion

    As you can see, some of these items will be easier than others to do. Unfortunately, as all lenders have different criteria when judging whether to lend to you, it is very difficult to know whether you are making the right changes to your credit score and this means that the task is not easy. However, if you note the points mentioned above and try to put them into practice then hopefully you will have an attractive looking credit record that will allow you to get the loan that you need.

  • Interest Rates

    How Can I Take Advantage of Low Interest Rates?

    We seem to be in a state of permanent low interest rates at the moment. It has continued for a long time and there are many savers that are finding it very difficult to manage as a result. This is because some savers rely on their interest to help them out and if the interest rates are low then they will be getting very low interest. This means that it is not savers that benefit from low interest rates but it is borrowers. Borrowing money can be really expensive but the lower interest rates are the cheaper it is. Therefore, there are ways that borrowers are able to take advantage of the low rates.

    Taking out good debt

    While rates are low it can be a good time to borrow because it is cheap. However, this does not mean borrowing for the sake of it as this is never sensible. What it means is that if you are thinking about buying a home, doing some refurbishments or spending other chunks of money that will have a positive effect on you and your life. Any sort of good debt will not only require it to be for a sensible purpose but also for it to be as cheap as possible. Although when rates are low, we do not pay that much for our loans, we should still make sure that we are not overpaying. This means that we should compare the different lenders and make sure that we are going with the one that offers the best value for money. Even one that is a tiny bit cheaper will save you some money and so it is worth the effort of comparing them. You need to also look at what else they are offering with regards perhaps to the reputation of the lender, the term of the loan, the amount you have to repay each month, to make sure that you are happy with all of that as well as the low price.

    You do need to be careful though as if rates are really low, they will be more likely to go up than down. This means that if you take on a large debt, that will take you a long time to repay, you could end up with very high interest payments. So, think hard about whether you are prepared to take this risk. It may be better just to borrow a small amount of money so that it will not be unmanageable if the rates do go up. It can also be wise to calculate how much the interest might go up if the rates do go up a lot and work out whether that is something that you can afford.

    Repaying early

    If you already have debts then having low interest means that you will have more money available to repay them early. This means that when the rates do go up you will have a lower debt or you may have even have paid them off completely.

    It is wise to look at the terms or check with customer services before planning on repaying a loan early. Some will have an early redemption fee which means that they will charge you if you repay it early. If this is the case then it could be more expensive to repay the loan early. You need to find out how much it will cost you to repay the loan at the current rate of interest and see how the fee compares to that. If the fee is less then you will be saving money. If it is more then you will not, but if interest rates go up then it could be worth paying it off early. If this is the case then it could be worth putting some money aside ready to repay the loan if the interest rates get so high that it is then worth it.

    So, if you are a borrower then you can really take advantage of low interest rates. You can either use the low rates to borrow at a low price. As long as you are borrowing to buy things which will make you better off, then this can be well worth it. You could find that you will be able to get things a lot more cheaply than you could if you had to borrow when the rates were high. You will also generally have more money due to low interest payments on loans you already have and this could mean that you will be able to afford to repay the loan early and save even more money.

    Unfortunately, if you are a saver then you will not be able to take advantage of low rates. You should make sure that you are saving at the best possible rate but switching to higher interest accounts will not make a huge difference because the rates are so low anyway. However, it can be worth considering tying your money up in fixed rate products or in notice accounts so that you can get a better rate of interest.