Credit cards Updated:
In these days of bank bail-outs, jittery stock markets and mortgage drought, it’d be easy to think that quick credit is a thing of the past. But you’d be wrong. Although credit is undoubtedly harder to come by than it used to be, there are still many ways that you can borrow in less than 24 hours.
A trip along any high street shows that there are a multitude of retailers ready and willing to offer store cards or interest-free deals, on products ranging from must-have fashion to designer sofas and electrical goods. Beyond the shopping mall, car dealerships and catalogue companies are still so eager for custom that they’ll set an account on the spot, while even a bank will give an instant answer on an overdraft or loan.
But before you hotfoot it to sign on the dotted line, you need to know what you’re letting yourself in for. Even though fast credit is still available, lenders are getting increasingly cautious – so don’t spoil your chances by not being prepared.
These tips will help you to get the deal you want – and avoid rushing into something you later regret.
…check your credit report. However short of time – and ready cash – you are, spare a few minutes to look at your credit report. This is the personal history of your credit cards, loans, mortgages and other credit accounts. It’s information lenders usually check when they decide whether to make you an offer, so it pays to be sure it’s in good shape. To give yourself the best chance of getting a good deal, make sure you close any unused accounts and that all your details are up-to-date and accurate – even a single error could cost you your application in the present economic climate. See your free Experian credit report now.
…read the small print. No matter how seductive the offer or persuasive the sales person, don’t commit until you have read the small print. What may seem to be a great package at first sight may hide some less attractive fees and penalty charges. Be particularly careful of introductory offers, which can look much less appealing when they revert to standard rates.
…decide if you can really afford more credit. You may think you can’t live without those fabulous winter boots or that state-of-the-art Bluetooth video phone, but do you really need it? A quick look at your credit report will give you an instant overview of existing commitments and whether you are already struggling to pay them off. It’s also a good time to tot up your incomings and outgoings to see how much you can afford to pay back each month – and where any savings could be made.
…make sure you’re registered to vote. It may seem an unimportant detail, but putting your name on the electoral register is a quick and easy way of making a good impression with lenders. They use this information to check you live where you say you do – and how long you have been at your current address. You can do it now at the Electoral Commission site, www.aboutmyvote.co.uk.
…make lots of applications. It may seem like a good idea to try for every offer you can to compare the results – but you’ll only be storing up problems. Lenders usually search your credit report each time you make an application, which leaves a record that lasts for 12 months. A significant number of these footprints could set alarm bells ringing for other lenders, who may think you’re desperate for money or that a fraud is being planned – and your credit rating could fall as a result.
…be tempted by bad deals just because they’re there You may want to borrow quickly but that doesn’t mean you should abandon common sense. Not every loan or card offer will be right for you, so make sure you know exactly what you are signing up to. Be particularly wary of short-term loans based on your monthly pay – some feature astronomical APRs and you may end up paying a very high price for convenience.
…over-extend yourself Before you apply for your new deal, decide how much you can afford and stick to it – never borrow more than you can afford. If you’re already struggling to pay your monthly bills, think carefully about whether you want to take on any more commitments. It may be better to delay making any new applications until you are on top of your finances.
…be disheartened if you get turned down If you’ve been refused a deal it doesn’t mean you’ve fallen into a financial black hole – lenders have always rejected applicants who don’t meet their criteria and now they are being more stringent than ever. Use the opportunity to take a long, hard look at your finances and find areas where you can economise, so you’ll be a better prospect next time you apply.
Remember, the best place to start getting your credit history in shape – and improve your image with lenders – is your credit report. You can check your Experian credit report for free with a trial of CreditExpert, the UK’s leading online credit monitoring and ID fraud protection service.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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