Most of us never think too much of an overdue payment or exceeding our overdraft by a small amount. But our financial tardiness could have a big impact on our financial future.
Did you know that if you miss one of your mobile phone payments, your credit score could take a serious hit and impact sourcing finance in the future?
Unfortunately, most people don’t and hence the panic when they decide to make a big purchase, such as a house or car, and cannot get the cash thanks to a poor credit rating.
A credit rating is simply a lender’s way to measure the risk of lending to you. The bigger the risk you pose, according to the lender’s credit score rating, the less chance you have of getting a loan.
As such, you need to keep on the right side of the bank. Keeping up with all credit card payments and bills will go a long way, but that is only one part.
Interestingly, some lenders look at whether you are on the electoral roll or not. If you are not registered to vote then your credit score will suffer. Registering to vote allows companies to verify your name and address, an important factor when it comes to your credit score.
Paying for everything in cash may sound like a good idea to manage your finances, however this does not tell lenders anything about your payments history or whether they can trust you to make payments or not. Have a card, and pay it on time to demonstrate your capability to make timely repayments.
If you think you have a poor credit record, you can contact a credit reference agency. If your information is incorrect, you can ask to have it removed. You can also get your credit report checked by various agencies, including CreditExpert from Experian.
