All you need to know about credit score rating

 

 

Guest post  by James Jones Experian’s Head of Consumer Affairs

When did you last check your credit score?

Despite now being free, less than half (45%) of British adults have ever taken the time to find out their credit score. So I guess there’s a pretty good chance you answered ‘never’ to the title question, which I think is a shame. Let me explain what your credit score is and why it’s important. And while we’re on the subject, I’ll try to set the record straight on some popular credit untruths too.

Your credit score is an assessment of your credit report (aka credit history), which is your recent track record managing a wide variety of credit accounts such as loans, credit cards, mortgages, mobile phone contracts, car finance, current account and even some regular household bills such as energy, water and broadband.

Ask a lender for credit and it’ll get your permission to check your credit report to help it predict how you’ll behave in the future. There are three agencies in the UK that compile credit reports on people my employer Experian, Equifax and Callcredit. Your report at each agency can differ as we don’t all work with the same credit providers.

To help lenders process large volumes of applications quickly and fairly your credit report is usually turned into a credit score. This indicates the probability you’ll miss future payments based on your credit track record. The higher the score the lower the risk. You can ask each agency for a copy of your report and for a guide credit score. It won’t be the same score a lender uses but will give you a decent idea where you stand.

The Experian Credit Score is calculated on a scale of 0-999. A score of 961 or higher is classed as excellent and around 30% of Experian’s customers have an excellent score. As a result, they should be able to access cheap borrowing from a wide range of providers. On the other hand, a poor score can leave you struggling to be accepted for credit and, if you are successful, paying over the odds for the privilege.

So, it can certainly pay to take a little time to find out your score and, if it leaves room for improvement, to explore how you might be able to improve it.

The three agencies have lots of advice on their websites on building a great score and they can give your personal tips if you get in touch. Services like Experian CreditMatcher can also show you which credit products you’re likely to be accepted for based on your current credit score, removing a lot of the guesswork from applying for credit.

To help make sure your credit score is right on the money, let me sign off by leaving you with my five top tips on getting your credit score in good shape, plus the top credit score untruths.

Top tips for a tip top credit score

1 Build a positive track record – use some credit and don’t miss payments.

2 Don’t max out credit cards, ideally keeping balances below 50% of the limit​. In fact, the lower the better.

3 Space out new credit applications to avoid looking needy.

4 Decouple your report from other people’s if they’re no longer linked to you (eg an ex-partner).

5 Register to vote – it helps ID checks and can give your credit score a boost.

Top five credit untruths

1 There’s a credit blacklist – nope, there isn’t one. Credit reports are factual and mostly positive.

2 Previous occupants affect your credit rating – not the case. Someone else’s credit history can only come into play if you’ve linked up (usually via joint credit with a partner).

3 Credit refusal damages your score – no it doesn’t and the outcome isn’t even shown on your report, just the fact that you applied. But do avoid multiple applications (see pt. 3 above).

4 Credit reference agencies decide who gets credit – not at all. We do help but only the lender can decide which customers to accept.

5 Checking your credit report (or your score) harms your credit score – absolutely not! You can do this as often as you like – so what are you waiting for?

About the author

James Jones is Experian’s Head of Consumer Affairs and leads the company’s public education programme, advising people on, for example, credit reports, credit ratings and identity fraud. James is frequently on TV and radio, and regularly answers people’s questions through both traditional media and online via the Experian website, Facebook and Twitter. He began his career at Experian in 1992 after graduating from Cambridge. He loves travel, sport and real ale, and regularly combines all three by following Nottingham Forest and Nottinghamshire County Cricket Club.

 

Mobile operator Giff Gaff makes big gaffe by hiking roaming charges

Press release

 

 

Giff Gaffe and roaming charges

Roaming charges are put in place when the mobile phone network detects that you are abroad and adds extra costs on top of what you normally pay on your national network. Charges are incurred for making calls, receiving a voicemail, picking it up, sending and receiving SMS text messages and pictures and, of course, using the Internet and downloading or streaming.

The European Commission is rolling out a new regulation, called “Roam Like at Home”, on 15 June 2017, when roaming charges in the EU cease to exist. From that date you will pay the same in 28 EU countries as if you were at home as part of your contract allowance. The new rules will be extended to Iceland, Liechtenstein and Norway in a few weeks time (date to be confirmed). All good news? Not if you are a Giff Gaff customer.

Giff Gaff is increasing charges for roaming in countries that are in the European Free Trade Association (EFTA) but outside of the European Economic Area (EEA). These countries include Switzerland, Jersey, Guernsey, the Isle of Man and Monaco.  Along with other providers Giff Gaff had previously voluntarily included non-EEA countries within the same pricing tier as the EEA. Although it has known about changes to roaming charges since 30th June 2015, it has decided not to continue this agreement, so customers will see a significant increase in charges when roaming in these countries.

Helen Dewdney, The Complaining Cow consumer champion and author of How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results! says that she is surprised by Giff Gaff’s decision and suspects that many customers will leave as a result. “It is very shortsighted of Giff Gaff”, she says, “All you have to do is get a SIM card from another network, port the number away a few days before you leave the UK to the new SIM to use the phone as you would in the UK and then port the number back. But Giff Gaff run the risk of losing loyal customers who may well feel that they are being ripped off.”

Dewdney warns “Of course there are also the customers who won’t realise and will end up paying over the odds too.”

When asked for a statement regarding their decision Giff Gaff’s PR company said it would supply one but despite being chased did not do so.

NOTE – A Giff Gaff spokesperson provided a statement too late for sending out the press release  but requested that it be added. “Unfortunately, because the Isle of Man, Guernsey, Jersey, Monaco and Switzerland are not classed as part of the EU, we have not included them in our ‘Roam Like at Home’ offer. We made the decision to amend the current price structure in these countries so that the overall costs to the business caused by changes to EU roaming are not passed on to every giffgaff member. We will be reviewing usage of our members from launch, and in September will likely be making a few tweaks to our policy based on learnings through this period. As a network that doesn’t lock people in to a contract, members will only be charged if they use their phone.

Your rights when roaming outside of the EU

1) All mobile operators have to apply a cut-off limit once you have incurred charges for €50 (excluding VAT) – around £36 – worth of data per month, wherever you travel in the world, unless you choose another limit.

2) The provider must send you an alert to your phone when you reach 80% and then 100% of the agreed data roaming limit. Operators must stop charging for data at the 100% point, unless you agree to continue to use data.

3) Under the Consumer Protection from Unfair Trading (Amendment) Regulations 2014 the retailer must ensure the customer understands what goods and services are being provided and ensure that there are no hidden costs. If the paperwork does not comply with the new requirements the consumer may not have to pay. When retailers send you email confirmation of the purchase this must now include a full description of the goods and services purchased, including their characteristics and the full price including tax and any additional charges or delivery prices.

4) Under the Consumer Rights Act 2015, traders must also provide services with reasonable skill and care.

All you need to know about roaming charges for more information on keeping costs down and how to complain when ripped off.

See also All you need to know about complaining to telecom providers