August 1 2014 Latest news:
Adam Aiken, Editor
Saturday, August 13, 2011
First-time buyers are being held back by a lack of awareness surrounding credit data, according to one of the leading providers of this credit information.
Although the first-time buyer market has expanded rapidly in recent months, with a growing number of mortgage products available for borrowers, Equifax said it thought many people could be missing out on the most competitive deals because they simply do not understand the importance of their credit information.
Recent research by Equifax into the credit card market suggested that a third of those declined for card applications did not know why they had been turned down. Neil Munroe, the company’s external affairs director, said he was concerned the same situation could exist with first-time mortgage borrowers.
“It’s vital that first-time buyers understand what information is used by mortgage providers to assess their creditworthiness, as well as how they can make sure their credit rating is at its best for them to get the most favourable deal,” Mr Munroe said.
“Something as simple as the fact that they are not registered on the electoral roll could hamper an individual’s ability to gain a good mortgage. Or it might be that a credit agreement they had forgotten about is showing as having an outstanding balance which could count against their credit score.
“We recommend first-time buyers check their credit report before they start applying for mortgages. And if their application is refused, they should stop applying and ask the lender why.”
The credit reference agencies are Equifax (visit www.equifax.co.uk or call 0844 335 0550), Experian (visit www.experian.co.uk or call 0844 481 8000) and Call Credit (visit www.callcredit.co.uk or call 0870 060 1414).
Credit reports include information on existing and former credit accounts, county court judgments, credit “searches” of your data by lenders and any shared financial commitments you might have.
For a statutory fee of £2 per agency, you can apply for a copy of your credit file. Although much of the data held by them will be the same, it can be worth requesting your file from all three agencies in order to pick up any anomalies on the information held about you.
If you spot anything untoward on your file – such as a search of your data that you did not authorise – it can alert you to potential fraud. Meanwhile, you are given the opportunity to correct any incorrect information held about you.
Sometimes, the agencies offer free access to your reports, but these free trials usually turn into subscription services if you do not cancel them before the introductory periods have expired.