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Archive for Tenant loans

What affects your credit rating

Wednesday, September 10th, 2008

There’s a lot of confusion about credit ratings amongst people seeking personal loans and other forms of credit.

Many people believe – wrongly – that a credit record shows whether a lender has refused credit. This is not the case. Every time you apply for credit a ‘footprint’ is created on your credit record to show other financiers what you have been up to, but no record is immediately made as to whether you took up an offer, or whether it was refused.

One thing that varies from lender to lender is ‘how much is too many?’ Most of us are familiar with the concept that lenders looking at a credit record showing multiple applications may – quite rightly – view this as a sign of someone desperately seeking credit. As this is rarely the sign of a good potential client, many lenders will turn this applicant down on principal.

But how much is ‘too many’ when it comes to applications. Lenders will obviously vary, according to their criteria, but a flag usually goes up if more than four applications have been made at any one time. If the applications are spread across a period of months, the lender will be more lenient.
Another factor that people misunderstand about their credit rating is how much stability affects their core rating.

When you apply for credit – be it a mortgage, a credit card or a personal loan – the lender wants to know more than anything that you will be able to repay. The greater the risk perceived, the higher the interest rate charged, which is why bad credit loans can be so expensive.

Factors affecting this can be whether you are married – a sign of committment – whether you are registered as a voter, how many times you have moved house and even how many times you have moved job.

Someone who is seen as high risk is not necessarily someone with a history of missed repayments and ccjs, but maybe someone who has jumped from job to job, moved house or town many times and generally shown a lack of stability.

So, if you’re wondering why you weren’t offered the best rates available on the loan you wanted, you may need to look deeper than you thought.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Credit Card, Credit record, Debt management, Homeowner Loans, interest rates, Missed payments, Personal debt, Personal loans, Property, Secured loans, Tenant loans, UK Finance, Unsecured loans | No Comments »

Massive rise in credit card use on mortgage repayments

Tuesday, April 1st, 2008

It has been revealed that more than one million people across the UK are using their high-interest credit cards to pay for their mortgages or their rent.

The figure which is roughly six percent of all households shows just how desperate some people are getting to keep a roof over their heads.

The figures which have been release by the charity Shelter show that more and more young people are struggling to remain on the property ladder and have been forced to take desperate measures, including the risk of long-term financial ruin.

The problem with using a credit card to pay for your mortgage is the amount of interest that credit cards charge their customers. Many credit card companies charge rates of between 15% and 18%. Rates like these are as much as three times greater than the rates applicable on the average mortgage. Paying your home loan with your credit card is a very risky and expensive way to avoid repossession or eviction.

The figures show in some areas of the country as many as one in ten people are using their credit card to pay for their mortgage. The people most likely to resort to this measure are in the 18 to 24 year age group. More and more people are finding paying for their mortgage or rent increasingly difficult as the credit crunch hits and unaffordable housing begins to take its toll on the consumer.

Experts are blaming lenders for the problem since the have allowed borrowers to borrow excessive amounts of money, not just on mortgages, but on personal loans, car finance and credit cards.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, Homeowners, Housing news, interest rates, Missed payments, mortgages, Personal debt, Personal loans, Secured loans, Spending, Tenant loans, UK Finance, Unsecured loans | No Comments »

Understanding The Fine Print

Thursday, January 10th, 2008

Before signing any contract or deal you are always told to read the fine print, and this is for a good reason.  Most of the important information that is almost always overlooked is mentioned in the fine print of the document.  Often this may include default terms or the eligibility of a good interest rate offer on a cheap loan or credit card.  It is estimated that as much as six million consumers fail to read the small print of their contract or transaction.

A recent study reveals that more than fifty percent of adults admitted to not reading the small print when buying financial products, mobile phones or electrical goods.  This is disturbing as often the lack of understanding of the fine print in your contract can lead to major problems or, in extreme cases, financial ruin.  Once a repayment contract on a credit deal – such as a mortgage or personal loan – has been breached, penalties and charges can snowball, putting the consumer at risk of losing their home.

One of the most important contracts where fine print must be completely understood is the credit card agreement.  All credit card companies are in the business to make a profit off their customers and with the Office of Fair Trading cracking down on unfair charges, credit card companies must then find other ways of making a profit.  Some of these ways include cash withdrawal fees, foreign usage charges; higher interest rates if the cardholder defaults as well as shorter interest-free periods.  It is important that consumers first read over the fine print of the credit card agreements before activating an account.  Often credit card holders fail to read over their agreements properly and overlook items such as handling fees for balance transfers or the high interest rates that are charged on cash withdrawals, and in some cases credit card providers are allowed to reprice a contract should the cardholder default on payments, which means they can then start charging a higher interest rate.

Posted in Bad Credit, Bank charges, Banking, Borrowing, Consumer Credit, Consumer debt, Credit Card, Credit record, Debt management, Financial products, Homeowner Loans, Homeowners, House repossession, interest rates, Missed payments, mortgages, Overdrafts, Personal debt, Personal loans, Secured loans, Spending, Store cards, Tenant loans, UK Finance, Unsecured loans | No Comments »

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