Aug/091
Problems Getting Credit? Remove a Default from your Credit Report
There are 3 ways in which you can repair your credit rating to achieve the ultimate result of getting that car or mortgage that you really need. These options are as follows:
1. If your default/delinquent balance is over £300 you should write to the bank in question to claim that you did not receive a notice letter of the bank’s intention to serve you with a default. It helps if you have actually got the letters of correspondence to refer to in your argument but don’t worry if you do not.
2. If your default/delinquent balance is under £300 you should take a softly softly approach and politely ask the bank or financial organisation to remove the default from your report. Use the angle that you feel it is extremely harsh and that you are struggling to provide a good life for yourself and family because you cannot get a mortgage or loan to pay for necessities.
3. Finally, if you have exhausted all possibilities and have written and replied to all letters sent to you, the only choice left is for you to start a programme of repair for your report. This isn’t 100% effectively but it does leave plenty of consumers happy. This basically involves starting up credit agreements where possible (if needed anyway of course) and settling existing agreements in the proper way (avoid early termination arrangements).
Default balance over £300
This is a fairly significant amount of money and if you put yourself in the bank’s shoes for a second you will realise that – unless a genuine mistake was made – this boils down to theft. This is basically why banks take a tough stance over this and throw defaults around like grains of sand. However, if the banks do not take the proper course of action in serving you with a default then they are robbing YOU in the sense that you are unable to purchase a house for example. That is why their practice needs to be scrutinised in the same way as your credit report is search.
Ask the bank if they can prove that a letter warning of a default was sent to the registered address before the default arrived on your credit report. After 2006 the banks tightened things up quite substantially but before this time their operations were quite unprofessional and filled with ambiguity. The bank should then respond to your letter with a reply – probably a standard template reply – but never the less you have you starting point.
From this point you can keep replying until they send you proof that a notice was served and also that the agreement that you entered into is enforceable. At that point you can give up and take the emergency repair steps for improving your credit report.
Default balance under £300
Most success stories in writing off defaults are usually found in cases where the amount is much smaller. This is because the agreements tend to be of a more trivial nature such as mobile hone contracts etc. Having a mobile phone and forgetting to cancel the contract after the 12month period (which you made payments for without problems) should not prevent you from buying a family home. Okay, so this is an extreme example but one which we have heard on more than one occasion.
Be nice, be polite, get to the point, don’t waffle, address it to the bottom of the company pyramid and work your way up until you get a reply from the very top. Hopefully by this point you will have received a positive response but if not following the following last resort to repair your credit rating.
Repair your Credit Rating
Your credit rating is key to a progressive life. Without a good credit rating you will get nowhere unless you are already there – if that makes any sense! You need to make sure it is as immaculate as it can be and no matter what the state of the economy (eg. If there is a credit crunch of any description) you can assure the financial establishments that their money is safe with you.
Step 1
Open an account similar to the Natwest Step account which offers you the opportunity to open a basic account and as you prove your worthiness of managing your account they will offer you debit card, then an overdraft, then an overdraft extension, etc. etc. such progression looks very good on your credit profile.
Step 2
Be smart, realise that a credit card is being used here for a very specific purpose and is not meant for borrowing money over many months or even years. Do not use it as an alternative to a loan.
Step 3
Do not buy a load of new gadgets. Instead buy 1 or 2 and get credit for them choosing to pay the balance over as long a period of time as possible. The more small agreements you have over long periods the better.
Jul/090
New Rules for Credit Cards
New regulations are forcing credit card issuers to stop increasing credit limits and sending blank credit card cheques without first assessing the consumer’s financial situation.
Blank credit card cheques do not protect the product bought with them if they are faulty like credit cards do, and they also have more expensive charges than the cards themselves. Without first checking the financial state of a consumer, it can cause serious levels of unpaid debt, the consequence of which falls to the consumer who has used the cheque or credit limit as a way of buying time against other debts they have.
The Government is now putting a stop to credit cards exploiting vulnerable consumers by bringing in a new legislation that stops credit cards issuers increasing credit limits without being requested to do so, or first checking the financial state of the consumer. They are also looking to ban unsolicited cheques by credit card firms being sent out to consumers. Both of which will hopefully decrease financial problems.
Jul/090
Police officers misuse credit cards
Some credit cards were issued to police officers for job expenses have been misused.
In 2003, the Metropolitan Police gave around 3,533 American Express credit cards to the staff and officers. However, 1,400 were then taken back after the met found they were being used for expenses that were not job related and couldn’t be accounted for. More credit cards were issued in 2006 to detectives in operations such as counter-terrorism and royalty protection etc.
In 2008, one sergeant detective was given a suspended 8 month sentence for 2 years after spending over £9000 on his credit card, and another was jailed for 10 months after spending £70,000 on his credit card. In both cases the money was not used as job expenses.
Now it seems that another 300 cases have come to light, 46 of which have turned into criminal investigations.
The Metropolitan Police Authority are appalled at the fact that police officers, who not only set an example to the community but are supposed to uphold the law, are actually breaking it and committing fraud.
Jun/090
The Sunday Times: Prepaid credit card funds are safe
Although not being covered by the watchdog’s own deposit compensation schemes, the Financial Services Authority (FSA) has strict regulations which mean that any concerns over the safety of funds held on prepaid credit cards are safe.
Prepaid credit cards are likely to prove popular among consumers using their credit cards abroad and looking to save money this summer.
This is because the cards - which are pre-loaded from the holder’s bank account - are subject to lower overseas usage fees and charges than other kinds of credit cards.
However, funds loaded onto popular FairFX and Caxton FX cards by customers are not held by the firms themselves, but are instead passed on to accounts at the Newcastle building society.
Having said all of this, customers are not directly protected by the Financial Services Compensation Scheme (FSCS) in the same way a bank account would be. This guarantee covers consumer for up to £50,000.
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