Problem Remortgages - Do You Think You Are Credit Blacklisted?

BLACKLISTED?Contrary to popular opinion, there's no such thing as a credit blacklistHere I am again sitting at the breakfast table listening to the radio with my kids. The news as always is a mix of sport, and doom and gloom.Banks withdrawing fixed rate mortgages due to high demand, inflation on the increase again, borrowing at an all time high, people unable to get on the property ladder BLAH BLAH BLAH !It took me back to a conversation I was having with a client yesterday about credit rating and how they were "blacklisted". Unfortunately, half of us don't fully understand what a credit rating is and how it affects our ability to borrow. A third of us have been refused a loan at some point and 40 per cent of this group don't know why.So for those of you who feel you have been "blacklisted" or are being refused credit in some way here (with grateful thanks to Experian) is a simple guide that separates credit fact from fiction.Myth 1: Previous occupants at your home affect your credit ratingA classic myth and most people believe it - but it's completely untrue. The previous occupant of your house or flat could have been a millionaire or a bankrupt, but that makes no difference to lenders at all. Lenders are only interested in your ability to cope with a loan, so they will look at your individual circumstances. It is a good idea to register to vote, wherever you live. That's one of the factors lenders take into account.Myth 2: Family and friends living at your address could harm your credit rating Until a few years ago, lenders checked the credit reports of others living at your address. They could then take their position into account when deciding whether to offer you credit - That no longer happens. Instead, your credit report contains a section listing your financial associates - people with whom you share a joint account, such as a joint mortgage. Lenders look at these instead.Myth 3: Credit reference agencies decide your credit ratingNo, they don't - Credit reference agencies collate the information held in credit reports and hold it securely. Lenders use this information, along with your application form, to calculate a credit score - a number that represents the risk that you will not repay what you owe. Generally, the higher your score, the lower the risk you represent and the easier you'll find it to get a good deal.Myth 4: Your credit rating is poor because you're on a blacklistAnother pub myth. There's no such thing as a credit blacklist. Red-lining - ruling out whole streets or estates - simply doesn't take place and your credit score does not take account of factors such as gender, religion, race or ethnic origin. What does count to lenders is continuity and how well you have managed your affairs over time.Myth 5: You have only one credit rating You can have many different credit ratings, depending on who you apply to, what you apply for and your circumstances at the time you apply. Every lender uses a slightly different equation to calculate a credit score - some also use different versions for different products. Your credit rating also changes when your circumstances change. For example, paying off a debt could improve your score, while missing a series of repayments could damage it.Myth 6: Past debts don't count Oh yes they do ! If you have missed repayments in the past, it stays on your credit report for 36 months. With a court judgement, the evidence is there for six years. A discharged bankruptcy stays on record for at least six years but a bankruptcy restrictions order is there for as long as 15 years. Lenders see these and mark you down, because they fear you may not honour your obligations.What to do nowDon't panic. You still may be able to get a loan or remortgage with a poor credit rating or if you are self employed by using brokers or lenders who offer loan products which take these situations into account. Also check your current credit report to ensure it is accurate and up to date. For example, you may have missed a few repayments because of illness or an accident. You can ask to add this on your file where lenders will see this note and can take it into account. " To check your UK credit file call Experian on 0800 656 9000" For free advice and details on problem remortgages and secured loans in the UK go to www.bigloanco.co.uk