Borrowing £500 over 1 year with Amigo is cheaper than borrowing £500 for 30 days with a payday provider.
Mail On Sunday, 16 Jan 2014
Millions of borrowers are paying more than necessary on credit cards, mortgages and loans – despite a run of cheap offers from providers. The Mail on Sunday looks at the best ways to shift or shrink your debt.
To avoid rejection by a bank or building society for a loan or credit card, do some research before you apply. Lenders use information about customers to assess their creditworthiness. This determines the deals they offer customers. Much of this data is held by credit reference agencies Experian, Equifax and Callcredit.
Applying for too many of the best mortgages or credit cards in a short space of time could be seen as a sign of financial difficulties or even fraud. A history of late repayments or not being on the electoral roll could also be a problem.
To see what information the banks might be looking at, get a copy of your credit report from one – or all three – of the credit reference agencies. Go to their websites at experian.co.uk, equifax.co.uk or callcredit.co.uk. All three credit agencies have a statutory obligation to provide you with your credit report for £2.
Callcredit offers a free report via noddle.co.uk. Experian and Equifax offer a free month’s trial with unlimited access to your report along with various services. But unless you want to pay a monthly sum of about £15 after that, you must remember to cancel the membership.
A simple way to gauge whether you are likely to get a credit card or loan is to try what is called a ‘soft search’. This is not a full application, and will not leave a mark on your credit report, but shows how likely it is you will be accepted.
Comparison website MoneySuperMarket has such tools for loans and a ‘will you get this card?’ feature for most credit cards. If you don’t have a good credit score, you can still get a card but it might not be the best on the market.
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