We all know how important it is to have a good credit rating as we often need to rely on it when we want to get a mobile contract, credit card or make a big purchase. However, worrying new reports suggest that it is in fact surprisingly easy to get a low rating just because of a few mishaps. Indeed, even missing a few payments on your mobile phone contract can jeopardise your chances of obtaining credit in future, for instance when buying a home or getting a loan.
Apparently the increasing difficulties of maintaining a high rating are due to lenders putting tougher measures in place in order to spot rogue borrowers. More and more companies such as mortgage lenders, banks and suppliers of credit cards are now doing thorough checks on new customers using credit reference agencies which hold customer details on record. Even minor problems on a record could make a company wary of lending you money.
Spokesman Neil Munroe from credit reference agency Equifax explains that there is so much evidence to show that lenders now require more details of your credit history before they can process an application. He says that "minor misdemeanours are becoming more relevant, especially for first-time buyers. A consumer’s mobile phone credit history would previously have been seen as secondary information. Now it is being scrutinised."
The fact mobile phone payments could be taken into account is the number of people who take mobile phones lightly. Not many realise that they could be harming their future when they fail to make a payment. It has in fact been estimated that up to 10% of the 24.4 million contract mobile phone users pay their bills late or do not pay at all. Should someone's attitude to a mobile phone really influence their ability to keep up much more serious mortgage payments?
One thing is clear: the more chance there is for your credit rating to be lowered because of things like this, the more likely it is for you to suffer unduly as a result. Indeed, there have been many cases where a credit rating has been lowered as a result of a fault on the part of companies. For example, say you have a mobile phone contract and you are overcharged one month and do not pay - even if the dispute is resolved, your details could have long been passed on into the bad books for credit. This is clearly unfair.
Though everyone would accept that lenders must know if the customer is reliable, there is some line to be drawn to check this reliability. Perhaps by weeding out the rogue borrowers, companies are also mistakenly rejecting those who would have perfectly kept up with any repayments.
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