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Your credit history lesson; THE MONEY DOCTOR ...WITH FERGUS MUIRHEAD PSFinancial worries or just looking for better value for money? Consumer champion Fergus Muirhead can helpFollowing these tips could increase yourchances of securing a mortgage or loan.

A COUPLE of weeks ago, I explained what credit reports are, what information they contain, and how and when you should ask one or more of the agencies to send you one.

This week we're going to look at what you can do if you don't like the information that appears in your credit report once you have seen it, and how you can change the content of your report to make it easier for your mortgage application to be accepted.

It's worth pointing out before we do this that it's not only rejection that can be the outcome of a poor credit report. The lenders may accept your application but at a higher rate than they would otherwise charge you if your credit report was better.

The first thing you need to do if your application is rejected, assuming you haven't done it before you applied, is make sure that it's accurate.

It's possible that there are entries on your credit report that are just factually incorrect.

You have the opportunity to challenge any information on your report and the credit agency then has 28 days in which to remove that information or tell you why they disagree with you. While that process is being carried out, the disputed entry shouldn't be used by potential lenders when assessing your risk for credit. You may find it easier to speak directly to the lender.

You can also add a note of correction to deal with information that was correct at the time of writing but is not now because of a change in circumstances.

For example, that could be if you got into debt because you were made redundant but you are now working.

It may be that all of the information on your credit report is correct and some of that information will stop you from being accepted for a mortgage or other loan and we will look at that next week, and offer you some positive tips to make sure your credit rating is as good as it can be.

It's also worth pointing out that the worst thing you can do if your application for credit is rejected is to make multiple applications elsewhere.

Don't make any other applications until you have investigated the reason for your refusal.

Here are some top tips to make sure that your credit report is as good as it can be.

Get on the Electoral Roll. Lenders like to see applicants with a bit of stability and they think that is helped if you are on the Electoral Roll at your current address.

Make payments on time. One of the biggest factors affecting your credit report is your ability to make payments on existing loans and credit agreements (and this could include utility bills and mobile phone bills) on time.

Missed and late payments will have a negative impact on your report so keep these to a minimum, or better still avoid them completely. It can help to make as many regular payments as possible by direct debit, that way you know that at least the minimum payments due will be made on time and you will never show as in arrears or late with payments.

Disassociate yourself from expartners. If you have split from a partner with whom you were involved financially then let the credit reference agency know that you are no longer involved so that their ongoing financial arrangements won't affect your credit report.

This also applies to people that you once shared a flat or house with.

Cancel unused cards. If you have credit cards or store cards that you don't use then cancel them once you have finished with them. Lenders don't like to see prospective borrowers with too many existing sources of credit.

Use credit to help you get credit.

Sometimes the problem with being accepted for a mortgage is not that you have a bad credit history, rather that you have no credit history because you have never applied for credit before.

There are some bank accounts and credit cards that specialise in helping people build a credit history. The credit cards charge a slightly higher than average interest rate but if you pay the balance off in full every month, you should be able to avoid most interest charges and start to build a positive history.

Top Tips Have a look at your up to credit history before applying for any new loan.

Remember that any money you take out of your pension might be taxed at a higher rate than you are used to paying.

Twitter Follow Fergus and tweet your comments, questions or suggestions to @fergusmuirhead Fergus is here to help Email your problems to Or post them to The Money Doctor, Daily Record, One Central Quay, Glasgow, G3 8DA Unfortunately Fergus can't reply to every question in person.


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Publication:Daily Record (Glasgow, Scotland)
Date:Jun 1, 2018
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