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Surprising things that could hurt your finances

We look at how an ex-partner could stop you getting a job or a hidden parking fine could stop you buying a house, and what you can do about it.

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Even if you’re on top of your money there are a few surprising things that can damage your finances.

We take a closer look at some of the unexpected things that affect your financial wellbeing and some surprising actions that can come back to haunt you.

Are your finances in good shape?

Check your credit report to make sure you're in good shape to apply for loans, credit cards, overdrafts, mortgages and mobile phone contracts

Compare credit reports

Can parking fines stop you buying a house?

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If you have a County Court Judgement (CCJ) or payment defaults in your name you are likely to struggle to get a mortgage.

Worryingly many people may be unaware they even have a CCJs against name. A recent investigation by the Mail discovered several legally dubious uses of CCJs by parking firms that were only discovered when people tried to take out a mortgage and were refused.

Prompting Prime Minister Theresa May to pledge to look into CCJ abuse, her spokesman said last week:

“There is an investigation now under way. We have a strong legal system and it is important that it cannot be abused. That is why the Ministry of Justice is now taking work to look into the specific issue around CCJs.”

Could being debt free stop you getting a mobile?

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If you have no history of borrowing you might actually be more likely to be refused credit than someone who has a history of being in debt.

What is considered as ‘credit’ can include some surprising things, such as mobile phone contracts and even some energy deals that advance you services before you pay.

So if you have a ‘thin credit file’ where there’s simply not enough information to determine whether you are a reliable borrower, you may be refused

If you’re concerned you might have a limited credit history read our guide on how to improve your credit score if you’ve never been in debt.

Could not being registered to vote stop you getting a credit card?

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Being on the electoral roll is one of the ways credit agencies will check your address history, which is a surprisingly big influence on your credit score.

To avoid fraud, lenders want to be sure of your identity before lending to you, one of the ways is to cross reference your name and address history with official government registers such as the electoral roll.

It’s unlikely being registered to vote will be the deciding factor in whether you can get a credit card, but it will help improve your score. For example, being on the electoral roll could be the difference between having a fair or good credit score.

Can old credit cards stop you getting new ones?

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If you’ve got too many old unused accounts it could count negatively against your credit score, this is particularly true of credit cards or bank accounts with overdrafts.

Too many unused credit facilities tare likely to count negatively towards your credit score. As even if you’re not currently in debt, lenders will be concerned that you have the option to quickly increase your borrowing.

So if you’ve not been using an old bank account or credit card, it could be a good idea to close it.

Could defaulting on payments stop you renting a home?

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Many landlords will also undertake a credit check against new tenants. They are doing this to check you’re reliable at meeting payments on time, in essence, rent.

If you have a poor credit score and a history of defaulting on payments then a landlord might not accept you as a tenant.

Could your dodgy ex stop you getting a job?

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Some jobs, particularly those in financial services, will check the credit reports of applicants before making a hiring decision.

This is usually to check for any history of fraud which will be marked on your credit report, past defaults and limited credit scores are unlikely to stop you getting a job.

However, if you have any joint financial accounts (these could include household bills) with an ex-partner who’s finances have been flagged as suspect by a credit referencing agency, this could be held against you.

Check your credit report

It’s well worth taking the time to check your credit report and score at least every few years, just to make sure you’re not missing anything that could hurt your credit score, especially considering a previous uSwitch investigation discovered one in three people found errors on their credit reports.

Your statutory report contains all information held about you by credit referencing agencies. It costs £2 to access and can be obtained from any of the three main credit reference agencies: Callcredit, Equifax and Experian.

Though to get access to your full credit report and score you will need to set up an account with a referencing agency. There are several other smaller agencies that will offer you access to your credit report too.

How can you quickly improve your credit score?

If you want to quickly  improve your credit score

  • Show that you can repay credit by paying bills and utilities in your name
  • Get a credit card, spend a little on it, and pay it back in full each month
  • Make sure you’re on the electoral roll or include proof of residency on your reports if you can’t vote
  • Make sure ex partners or former housemates aren’t accidentally pulling down your score
  • Close any old credit cards you’re not using
  • Make sure any accounts you have include your correct address details
  • Don’t apply for too much credit too quickly, as it looks bad
  • Stay away from poor credit practices like payday loans or withdrawing cash on your credit card

Though it’s worth noting your credit file is seen differently by different lenders and can take a while to mend itself.

Are your finances in good shape?

Check your credit report to make sure you're in good shape to apply for loans, credit cards, overdrafts, mortgages and mobile phone contracts

Compare credit reports

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