The better your credit, the better competitive rate you will get on a loan.
The details in your credit file can be accessed by lenders when you apply for a loan. It shows them information about your financial history, for example your record of paying on time, your total debt, whether you’ve been bankrupt.
Here are a few tips for improving your credit score.
If you have never used credit, then your file will be empty and potential lenders won’t be able to work out whether you are safe to lend to or not. This affects your chances for any kind of credit, including a mortgage loan or even a mobile phone contract. Therefore, you need to work at building a credit history. A good way to do that is to get a credit card. You cannot qualify for any of the best credit card deals without credit, but some of the products are aimed at those with little or no credit history. The interest rate will be high, so you should pay your balance in full every month to show you can manage credit responsibly.
Many lenders will check to see if you are on the electoral role at the address you provide to avoid identity fraud. If you are not registered to vote from that address, you’ll find it harder to get credit.
Make sure your file shows that any Country Court Judgments have been settled and ask the court to inform the credit agencies. Outstanding CCJs can badly affect your credit score.

©2012 MoneyBlog. All Rights Reserved.

A number of lenders have cut their rates over the last few weeks. In fact, it is becoming easier to get a competitive rate with a smaller deposit.
David Hollingworth at L&C is cautiously optimistic about the market: “In terms of new deals, I would say a greater stability in the market is breeding more competition. As house prices stabilize, lenders are starting to show more appetite to lend, so they’re finally starting to compete for customers.” David continued: “Up until recently, the only competition has really only been at the low-risk end of the market with a number of lenders fighting over homebuyers with large deposits or significant equity in their property, but it’s beginning to filter down and we’re seeing a greater willingness to lend up to higher LVTs. The signs are definitely encouraging. We’re obviously not back to boom times, but the mortgage market is better than it was a year ago.”
The top deals are still for those with a large deposit, but there are cuts.
If you have a deposit of 45% or more, Coventry Building Society has just launched a two-year fixed rate of 3.45% – plus fees of £999. Its two-year fix is at 3.45%, again with fees of £999.
From Saturday January 16, the market leader will be a two-year fix from Principality, which is offering rates of 3.44% for loans of up to 65% with fees of £999.

It’s not only fixed rates that are coming down. Some lenders have also cut their tracker rates. If you are happy to take a bit more risk and opt for a variable rate mortgage, you can benefit from some even lower rates.
For example, HSBC is reducing its tracker rate from 2.59% to 2.49%, again for those with a 40% deposit and fees for £999.

©2012 MoneyBlog. All Rights Reserved.

The country’s biggest personal loan provider has a new pricing strategy that could make it even harder for people to find the best deal.
Lloyds TSB has changed the way it prices loans. Rather than advertising a rate which is offered to the majority of successful applicants, it has moved to a personal pricing strategy.
This means that would-be borrowers will no longer be able to see the typical rate being offered by the bank – they will have to apply to find out what kind of deal they will be given.
Customers with good credit histories will be offered the most competitive rates, but if the bank thinks there is a risk of the customer defaulting on a loan, a higher rate of interest will be charged.
This is not unusual. Lenders always run a credit check when evaluating a loan, credit card or mortgage application. However, most advertise a “typical” rate and this must be offered to at least 66% of successful applicants, which at least gives you some idea of how much the loan will cost before you apply.
However, by changing to personal pricing, Lloyds TSB will stop advertising a typical rate. Borrowers (who must also be existing customers) will have to apply in order to see what kind of deal they will be offered.
Every time a credit check is made on a person, a mark is left on the credit file. A Treasury Select Committee criticized the way the market works – even among lenders that do advertise a typical rate.
Multiple credit applications can have a negative impact on your credit score, making it harder for you to shop around for the best deal.
Without showing a typical rate to guide borrowers, Lloyds TSB’s latest move may make it even harder for customers to find the best deal.

©2012 MoneyBlog. All Rights Reserved.

No further court action will be taken by the Office of Fair Trading (OFT) over the unauthorized overdraft fees.

This is a big disappointment for the 1.1 million people who had hoped to have bank charges refunded.
The OFT decided to drop the court case after the Supreme Court ruled last month that the OFT did not have the power to investigate unauthorized borrowing charges under the Unfair Terms in Consumer Contract Regulations. These are the fees that a consumer pays if their account is overdrawn or over the agreed overdraft limit.

Chief Executive of the OFT, John Fingleton, said: “The Supreme Court judgement was not the outcome we hoped for and was disappointing for many bank customers. Having now considered in detail all the options available to us in light of the judgement, we have decided not to continue with what would be a narrow investigation with limited prospects of success.”

More than one million people complained about these fees and most of the claims had been on hold until last month’s Supreme Court ruling. There is now no chance the banks will automatically refund the charges to the customers.

The moneysupermarket.com’s head of banking, Kevin Mountford, said:

“For those still trying to reclaim charges, the OFT has left the door open for them to take their complaint to the Financial Ombudsman Service, but their chance of success has lessened following this decision. This shouldn’t stop people trying and no doubt some will pursue this option, but many are likely to quietly drop their complaints.”

The OFT is still concerned about the way the current account market operates in the UK and they will continue to try and change the way banks charge.

Fingleton added: “We are committed to securing significant changes to unarranged overdraft charges going forward, whether through voluntary agreement with the bank or by other means. Customers can play their part by looking for value for money and switching accounts, if necessary.”

©2012 MoneyBlog. All Rights Reserved.

Latest figures show UK consumers repaid a record amount of debt during October 2009. Credit card, loan and overdraft debt fell by £579 million during that month.

HIS global Insight chief UK and European economist, Howard Archer said: “The record, and fourth, successive net repayment in consumer credit in October is clearly the consequence of many consumers’ desire to reduce their debt.”

Strong repayments on loans offset the rise in credit card lending, but consumers increased their credit card debt by £134 million, almost double the £78 million rise in September.

In order to treat customers fairly, Hal Austin told the Financial Times greater access to low interest credit card deals is needed.

©2012 MoneyBlog. All Rights Reserved.