CCJ Mortgage Loans, Credit Card Loans UK

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Looking for Credit. It pays to be whiter than white.

The change in financial markets in the last few months has resulted in a generally tougher approach by lenders to people looking for credit, whether it’s mortgages, loans or credit cards.

As lenders struggle to contain bad debts, the knock on effect of the sub prime situation in the USA and the fallout from the Northern Rock affair, they are tightening up on their requirements, from being able to prove one’s income to having an acceptable credit record, The rate of mortage applications is already increasing according to recently published national data.

So if you are likely to be looking for credit, are there any steps you can take to increase your chances?
The main answer is to try to keep your credit record as clean as possible: Here are a few tips to keeping your credit record in good order and even rebuilding it if its been damaged.

Try not to miss payments.

Try to keep all your payments up to date. Missed payments for things such as mobile phones can affect your credit record and of course your bank will keep a note if you exceed your overdraft limit, which may be seen by people searching the big credit referencing agencies.

If you don’t make a payment to a utility or the credit card you could end up in court which could result in you getting a CCJ (County Court Judgement) against you.. This stays on your credit record for 6 years so it can easily affect your ability to obtain credit for years afterwards.

Find out what’s on your record

Get a copy of your credit record form the main reference agencies (Experian and Equifax). You can do it online (there’s a small fee.) or write to them. That will reveal any black marks and whether there are any old ones that have expired.. If you disagree with any items you can ask for a note of up to 200 words to be added to the record. You could even complain to the Financial Ombudsman.

Clean up any out of date items

If you find some old black marks which have expired you can apply to have them removed. It’s also important to close down old accounts because if you have too many accounts open people might think you have too much credit already.

Keep your address up to date

If lenders lose touch with you they may take action resulting in a court judgement and blots on your credit record. Its easy to forget about small balances. So let people know when you move and make sure you are on the electoral register. Lenders instantly reject people who they can’t find on the electoral register,.becausethey have a duty to confirm your identity. If you don’t get an envelope through the door, contact your council.

Check your’e not associated with someone with a poor record

Your credit record can be affected by the record of another person with whom you share accounts such as a joint bank account or mortgage. If there are some items on the other person’s record that could affect how lenders view you as a risk.

Try to improve your payment pattern

Even if you have erred in the past, keeping your payments up to date from now will help to clean up your credit record. If you have some unpai d debts try to clear them and make sure that any records are adjusted accordingly. Make overpayments if they will clear up overdue accounts faster.

Be ready with more detail
What lenders like to see is proof of income. So PAYE slips from your employer, bank statements showing your regular salary going in, receipts from the taxman for your annual return if you are self –employed.
If you have more than one source of income provide some documentary evidence. If overtime or bonuses make up a part of your income show pay slips that reflect them.

Don’t despair if your record is les than first class.

A lot of panicky stuff has been talked about the people with black marks (sub primes). But in fact its still possible for people with CCJs, some arrears or similar to get credit. What has mostly changed is that interest rates have risen, and particularly if you are looking for a mortgage, remortgage or secured loan, the maximum that a lender will be willing to advance against the value of your property may well have fallen. But the pattern varies from lender to lender. A similar position may appear for the self employed who are often tarred with the same brush as the sub primes but in fact may have a perfectly good income and credit record. Lenders are preferring individuals without very heavy blots on their credit record so the more you can improve it, the better.

Even more importantly, look around - there are still many lenders who will consider people with impaired credit records. Consult a Mortgage Broker or Financial Adviser who has access to the whole of the market, not just the mainstream lenders. They will know what’s around for people like you.

Adam Brand is operations Director of First Union Mortgages Ltd. 01707 887799
Email info@firstunion.co.uk

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