Bad Credit - The Facts

Bad Credit The Facts ------ Slipping into bad credit can be easier than you think and many of us can be affected at one point or another in our lives. In fact, 24% of consumers are worried about their ability to make their repayments in the future. What is a credit score? His: His not: Calculated based on a lender's Universally applicable - just because you've been rejected by one lender, doesn't mean you'll be rejected by another. 'perfect customer' wish list, meaning your credit score will differ from lender to lender. VERY POOR POOR FAIR GOOD EXCELLENT How bad credit happens Going overlimit or exceeding overdraftlimits Late payments Exceeding your existing overdraft or credit limits can indicate you are not in control of your spending. Numerous late payments in the recent past will damage your credit score. Not on the electoral register Too many applications Electoral roll information is used by lenders to confirm your identity. No identity confirmation? It will appear like you don't Applying for credit from lots of places in a short space of time can make you look like you have an urgent need for credit (a bad risk for the lender). exist, or have no credit record at all. CreditCard Credit cards in the UK 4012 749b 23 4123 BPENS 00/00 CARDHOLDER NAME AVERAGE HOUSEHOLD UK DEBT: £7,900 AVERAGE CREDIT CARD BALANCE IN THE UK: £1,000 NUMBER OF ADULTS IN THE UK WHO HOLD A CREDIT CARD: 30 MILLION UP TO A THIRD OF UK CREDIT CARDS DO NOT INCUR INTEREST CHARGES AVERAGE AMOUNT OF CREDIT CARDS A CARDHOLDER HAS: IN A GIVEN MONTH 1.9 I IN 4 YOUNG ADULTS USE CREDIT CARDS FOR SPENDING ON 'ESSENTIAL ITEMS' WHICH MEANS A TOTAL CREDIT CARD DEBT IN THE UK OF: £57 BILLION What affects your credit score? Quiz TAKE OUR QUICK QUIZ TO TEST YOUR KNOWLEDGE Do you know what banks and lenders consider when they're considering your application? 1. Pastfines YES OR NO 2 Being registered on the eectoral roll YES OR NO 3. Payment history YES OR NO For current credit arrangements and settled accounts in last 48 months 4. Court records CCJS etc YES OR NO 5. Student loans YES OR NO 6. Declined applications YES OR NO Check your answers at the bottom! How to boost your credit score Get on the electoral roll (if eligible) Keep up to date with all your payments Close dormant accounts Time your credit applications Check your credit report for mistakes on aregular basis Ensure all your accounts/financial commitments are registered to your current address Quiz answers: I. No / 2. Yes / 3. Yes / 4. Yes / 5. No / 6. Yes Sources VANQUIS BANK PwC UK CARDS ASSOCIATION BBA www.vanquis.co.uk INFOGRAPHIC BY FRESH EGG - WwW.FRESHEGG.COM Bad Credit The Facts ------ Slipping into bad credit can be easier than you think and many of us can be affected at one point or another in our lives. In fact, 24% of consumers are worried about their ability to make their repayments in the future. What is a credit score? His: His not: Calculated based on a lender's Universally applicable - just because you've been rejected by one lender, doesn't mean you'll be rejected by another. 'perfect customer' wish list, meaning your credit score will differ from lender to lender. VERY POOR POOR FAIR GOOD EXCELLENT How bad credit happens Going overlimit or exceeding overdraftlimits Late payments Exceeding your existing overdraft or credit limits can indicate you are not in control of your spending. Numerous late payments in the recent past will damage your credit score. Not on the electoral register Too many applications Electoral roll information is used by lenders to confirm your identity. No identity confirmation? It will appear like you don't Applying for credit from lots of places in a short space of time can make you look like you have an urgent need for credit (a bad risk for the lender). exist, or have no credit record at all. CreditCard Credit cards in the UK 4012 749b 23 4123 BPENS 00/00 CARDHOLDER NAME AVERAGE HOUSEHOLD UK DEBT: £7,900 AVERAGE CREDIT CARD BALANCE IN THE UK: £1,000 NUMBER OF ADULTS IN THE UK WHO HOLD A CREDIT CARD: 30 MILLION UP TO A THIRD OF UK CREDIT CARDS DO NOT INCUR INTEREST CHARGES AVERAGE AMOUNT OF CREDIT CARDS A CARDHOLDER HAS: IN A GIVEN MONTH 1.9 I IN 4 YOUNG ADULTS USE CREDIT CARDS FOR SPENDING ON 'ESSENTIAL ITEMS' WHICH MEANS A TOTAL CREDIT CARD DEBT IN THE UK OF: £57 BILLION What affects your credit score? Quiz TAKE OUR QUICK QUIZ TO TEST YOUR KNOWLEDGE Do you know what banks and lenders consider when they're considering your application? 1. Pastfines YES OR NO 2 Being registered on the eectoral roll YES OR NO 3. Payment history YES OR NO For current credit arrangements and settled accounts in last 48 months 4. Court records CCJS etc YES OR NO 5. Student loans YES OR NO 6. Declined applications YES OR NO Check your answers at the bottom! How to boost your credit score Get on the electoral roll (if eligible) Keep up to date with all your payments Close dormant accounts Time your credit applications Check your credit report for mistakes on aregular basis Ensure all your accounts/financial commitments are registered to your current address Quiz answers: I. No / 2. Yes / 3. Yes / 4. Yes / 5. No / 6. Yes Sources VANQUIS BANK PwC UK CARDS ASSOCIATION BBA www.vanquis.co.uk INFOGRAPHIC BY FRESH EGG - WwW.FRESHEGG.COM