Have you checked your credit report lately? If one of these common mistakes is lurking on yours, it could be holding you back.
Having an up-to-date credit report can make or break your application for credit.
Whether it’s a personal loan, credit card, mobile phone contract or mortgage you’re applying for, lenders will look at it to help them decide if you’re a responsible borrower. While an up to scratch credit report can open you up to the very best credit deals, an out-of-date one can do quite the opposite.
So, to help you keep yours on the straight and narrow, here are five common mistakes many of us make, why they can impact you, and how you can fix them.
Mistake #1: Wrong address
If you’ve moved address, it’s important to let your bank and other credit providers know about it. If you don’t, it could harm your credit score.
Credit reference agencies, like Equifax, Experian and CallCredit, use your address to a) confirm your identity, and b) match your credit information to you. So, if you’ve got an outdated address on your file, it can lead to inaccurate information in your credit report, which can have a knock on effect on your credit score. Which isn’t what you want.
It’s also really important to check your address for any typos, as this can make it more difficult for lenders to verify where you live.
Mistake #2: Old accounts
Having multiple lines of credit to your name can make it look like you have access to lots of cash. And, if you’re applying for another type of credit, this can make lenders wonder why you want to get your hands on even more money.
So, if you’ve got an unused credit card, loan, store card or catalogue account to your name and have no intention of making the most of them, close them down. If you don’t, you may find it harder to be accepted for credit.
It’s worth noting though, if you have an account you’ve had open for a number of years that helps demonstrate you’re a reliable and responsible borrower, closing it could have the opposite effect. In this case, instead, it might be worth leaving it open and spending on it little and often to keep it ticking over.
Mistake #3: Outdated connections
If you once took out a loan or mortgage, for example, with your other half, but you’ve since separated and handle your finances individually, remember to break up with them financially too.
If they’ve got a good credit history, remaining associated with them won’t necessarily do your score any damage, but it’ll leave you with incorrect information on your report. However, if their credit history goes downhill and you’re still linked to them, they could make you look bad too.
To separate yourselves, you just need to close down the shared product and let the credit reference agencies know. If you were partners, not spouses, you’ll need to provide evidence that you’ve been living apart for six months or more. If you were married, however, you must be divorced before you can detach your finances.
Mistake #4: Not being on the electoral roll
Even if you have absolutely no intention of voting, make sure you’re registered on the electoral roll - it has a fairly huge impact on your applications for credit.
Most lenders use the electoral roll as a way to verify an applicant’s identity to help prevent identity fraud. So, quite simply, if they can’t see that you are who you say you are, your odds of being accepted shoot right down.
So much so, in fact, that Equifax’s External Affairs Director, Neil Munroe, said “not being on the electoral roll could mean your credit application doesn’t even get past first base.”
If you’re not already on the electoral roll, don’t worry, this one’s super easy to fix. It’s free, only takes around five minutes, and can be done here.
While as a rule you only need to register once, you will need to re-register if any of your below change:
Mistake #5: Unfamiliar applications
If you spot a hard or soft search, product or financial association you don’t recognise on your credit report, it could be an honest mistake on the lender or credit reference agency’s behalf, or, it could be a sign of financial fraud.
Before you go into panic mode, on the off chance it’s an application you made or account you opened but have since forgotten about, give your lender a call to see if it’s genuine.
If it wasn’t made by you though, there’s still no reason to panic, but it is important to act quick. If you suspect fraud you need to:
1. Let your lender know so they can cancel the credit before any more money is spent
2. Contact the National Fraud and Cyber Crime Reporting Centre and file a report
3. Raise a dispute with Equifax to get the item(s) removed from your report.
After a bit of further reading on your credit report? Then you might find these blogs useful: