IT’S enough to make you growl. You apply for a credit card or loan , get accepted but they inform you the rate’s far higher than advertised.
Worse still, the application hits your credit score, making other cheap credit harder to obtain.
This is the vicious circle of credit application, yet a fewnewtechniques may help you square it.
Here are my top ten must-knows.
1. Almost every card and loan’s now ‘representative APR’, meaning only 51 per cent of accepted applicants must get the advertised rate. The rest get costlier deals. How do you find out?
By applying, but each one hits your credit score.
2. A few lenders have launched ‘soft’ searches that indicate likely acceptance without marking your file. I applaud this – more lenders should followsuit.
Here are some of the top ones.
3. No-fingerprints 15 months 0 per cent debt shift. The Fluid credit card lets accepted customers shift existing card debts to it at 15 months per cent for a low 1.5 per cent fee. Clear the debt before the 0 per cent ends or the rate jumps to 18.9 per cent representative APR.
However, its killer feature is it lets you pre-apply, so you’ll knowyour chances of getting the 0 per cent - without leaving tell-tale marking your credit file. And not a bad way to work out if other cards are likely to accept you too.
However, it’s worth noting while this is a good shorter term 0 per cent deal, as there’s a lowfee, much longer is possible – you can shift debts for up to 23 months 0 per cent. Visit www.moneysavingexpert.com/balancetransfers
4. Lock-in debts at 5.9 per cent for life if you’re accepted. Here, applications will go on your file, but if you’re accepted forMBNA Rate for Life, all debts shifted to it within 60 days are at a guaranteed 5.9 per cent APR (1.5 per cent fee) until repaid, in other words, it’s NOT a representative rate.
Don’t miss your monthly minimumrepayments though, or you’ll lose the deal, and beware spending as it’s at a much higher rate.
5. For loans over £7,500, Nationwide is 6.8 per cent representative APR or 6.3 per cent for existing customers. It gets costlier for very large amounts but it does a soft search, so you’ll get a strong indication of the rate without it hitting your credit file.
6. Compare cards and find which will accept you. I’mnot a fan of credit card comparisons, as it’s just as much about howyou use cards as the rate. Yet MoneySupermarket’s Smartsearch can predict likely acceptance from the 30 providers it compares – and it does this without any fingerprints on your credit file.
Though do be very careful to ensure you knowexactly what you’re doing and the best way to work a card once you get it.
7. What lenders really know about you. There are lots of myths about what information credit files actually contain.
What’s on your credit file: Your addresses, County Court Judgement and Bankruptcy record, six years’ credit history of credit applications and loose repayment history, and some utility history. What’s not on it?
Criminal records, parking or speeding fines, your race/religion, savings, salary, CSA info, student loans, credit rejections, PPI or bank charge reclaims.
8. Earn £100 cashback and (re)build your credit score. A key to (re)building credit worthiness is proving you can behave well, by getting a credit card and never missing a repayment. The Aqua Reward is aimed at poor credit scorers, even some with CCJs/defaults over a year old pass its credit score. Applications will go on your file, but, uniquely, it pays a big 3 per cent cashback on all spending up to a maximum of £100 a year.
However, it’s a horrid 34.9 per cent representative APR, so do your normal spending on it, which will help build your file. But ALWAYS fully repay each month to avoid interest and never withdrawcash – so there’s only gain, no cost to you.
9. Checking your credit files doesn’t go on your credit file.
It’s important to regularly check to spot any errors. When you do, you’ll often see howmany times you’ve checked in the past. Many worry this hurts them, but only you see this information, lenders don’t. There are three credit agencies: Equifax, Experian and CallCredit. You can check them all online for £2 each – to get them free, see www.moneysavingexpert.com/creditrating
10. Don’t worry, insurance comparisons are no fingerprints.
Many people worry that when they’re using a comparison site to find cheap insurance deals these involve getting quotes for credit. Yet credit reference agency Experian confirms comparisons only use soft searches.
Rebate for wearing a uniform
‘I GOT a £338 uniform tax rebate in 3 weeks’: If you wear/wore a uniform for work and wash or repair it, you could get £100s back – whether full nursing or police attire, or even just a simple T-shirt.
Provided you don’t ever wear it for anything else, if you wash and maintain the clothes you may be due an extra tax-free allowance.
Most successes are £20-£60, but some, such as this user of my site got much more: “I work for the police and recently reclaimed laundry allowance. Three weeks, and £338 later, I’m very happy. A bonus, as the girlfriend does the washing. Should I split it? Nah.”
It just involves writing a letter and claims can be backdated for four years. Visit www.moneysavingexpert.com/uniforms
Print summer snaps for free
WANT to print beautiful pics without an ugly price?
Tell my new Photo Print Finder tool how many prints you want, the size and finish, and it finds the cheapest deals from ten major online photo retailers. It includes up to 345 free prints for newbies.
Try it at www.moneysavingexpert.com/photo