When considering all of the aspects that can determine the financial well-being of an individual within the United Kingdom, perhaps none is more important than one’s credit score. A consumer who has a decidedly positive score will have the ability to take out higher loans and borrow more money. Conversely, those with extremely low ratings will be unable to qualify for financial aid or loans for a variety of purposes. Thus, maintaining a healthy credit rating is essential to maintaining a comfortable way of live.
Most people work hard to keep their rating as good as possible, but sometimes identity theft, cybercrime or even silly mistakes can see a score falling. The requirement for an acceptable financial rating has seen the advent of score repair agencies, companies that will work to remove erroneous information and rebuild a score up to acceptable levels, although it is perfectly possible for a person to take these steps themselves.
The world has changed dramatically over the last fifty to sixty years. People can have almost everything they want without needing to save up for it first, all they have to do is to prove that they are gainfully and regularly employed, and that their income is such that they can make the required repayments. Nearly everything can be put on terms: houses, cars, even university educations, thanks to the widespread use of student loans.
People who take out credit cards, large cash loans or the products mentioned above, and then fall behind on their repayments can find themselves in a very precarious financial position fairly quickly. Defaulting on financial agreements usually incurs penalty charges and large amounts of interest being incurred, plus the lenders will lose little time in updating the credit bureau information with news of the defaults, thereby making it very hard for the person to gain access to such facilities again.
There are still a few die-hards who insist on saving the cash before they purchase anything, which you would think to be a good thing. Well, not necessarily! If credit companies cannot find any record of the person it can affect their ability to rent a home, hire a car, open an online retail account: any number of regular day-to-day activities can be impacted upon by a non-existent report as much as a bad one.
If you are trying to build a good financial trail it is actually best to make use of some financial facilities, but take great care to make repayments promptly. If possible, take advantage of free credit periods and settle the balance as quickly as you are able. In this way you will build up a discernible trail that employers, banks and any other relevant parties can follow to verify that you are financially trustworthy, and to also help back up your identity documents. People moving to a new country may struggle initially to qualify for financial services while they build up a solid history in the new country, especially where there is no reciprocal agreement between their old country and the new one's financial assessment companies.
- Your rating is your financial footprint and ideally it should be clean and clear, not almost invisible or bad
- Your financial history is important to many aspects of modern life, so it should be looked after carefully
- It is possible to rebuild your credit score by borrowing small amounts and paying it back properly, and you can have inaccurate information removed from reports