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Fallacies, Myths and Untruths Surrounding Your Credit and Personal Finances

Fallacies, Myths and Untruths Surrounding Your Credit and Personal Finances

There are a lot of conspiracy theories always being tossed about, and there have been for centuries.

There was more than one gunman on the “grassy knoll” in Dallas on November 22, 1963, aliens bodies are in Area 51 in the United States, Elvis is still alive and a toll booth guard on the Jersey Turnpike, dragons once roamed the earth, and more.

There are always and always will be odd and weird theories, myths, and fallacies people hear and then believe. Some sound very true and logical.

In part, this is how fake news can get started.

In the world of credit, lending and borrowing, and your personal finances, these mislead thoughts, myths, and fallacies may cost you money.

So let’s look at just a few of the more common ones.

Guilt by Association

Many people believe that if they live with someone who has bad credit, or if their partner or spouse has bad credit, they will suddenly by association, also have bad credit.

This is not true.

Each person has their own credit history and credit file.

The only way someone else’s credit affects yours is if you have co-signed or guaranteed a loan for someone, and they have default on that loan. Then it can affect your credit.

Living or moving in with someone who has bad credit or has collectors chasing them, does not involve you or your credit; no matter what a collector may say!

Even being an authorised user on an account does not affect your credit. You are simply a user of the account, it is not reported on your credit history.

If you are concerned about someone you living with affecting your credit, you can have a Notice of Disassociation placed on your credit history.

Previous Tenants Collection Post: In the past creditors used addresses as a way to check on people and accounts, as they “checked” an entire address.

This was stopped back in 1994, and has since moved from a fact, to a fallacy.

Creditors may use the Electoral Roll to verify you live at an address, and being on the Electoral Roll can help to improve your credit score, just because someone who has poor credit previously lived at your address, does NOT affect your credit and credit score.

If you receive post of a collection nature for a previous tenant, you can simple return it to the carrier or local post office having written no longer at this address across the post.

Bad Credit Affects My Job

Thinking bad credit may affect your job is not so much a myth, but a truth that has many caveats.

There are some jobs, and positions within certain companies, that a credit check is a part of the vetting process to get hired.

Does this mean that having bad or poor credit may exclude you, or lose you the job….possibly.

Jobs that involve the handling of cash, or are in the finance sector, these employers may use credit checks as a part of the hiring process, which means if you have bad credit, you may not get the job.

Just like jobs that use DBS or police checks on potential employees, credit checks could cost you a job.

So while not a total myth, there is some truth to this depending on the job.

The Return of the “Black List”

Just to end this constant and continuous myth…there is no black list amongst creditors.

There is a credit scoring system, and from this, you can receive a low credit core, which can hinder your ability to receive credit, but there is no secret list of names that banks and lenders will not extend credit to.

Debts Do Not Follow You Around the World

This is another myth or untruth that has spread over the years.

If you owe a debt in the UK and move to the EU, or anywhere in the world, or if you have debts in the UAE, or USA, or anywhere in the world and move back to the UK, you still owe the debt.

The account or money you owe does not go away or disappear just because you have moved outside the country of origin; the country where the debt began.

Does this mean a bank or collector in the UAE has authority to collect an account in the USA or UK, no, they do not have authority to collect the account. However, you still owe the money.

The authority of the lender may only extend in the country where they are, but there can be instances where the account/debt can be collected anywhere in the world.

* The account is sold to another agency to collect.

* The account is assigned to another agency to collect.

If one of these changes occur, then the account can be collected in the country you now reside in, outside the country of origin for the account, and the account can be collected in accord with the rules and laws of the country you are now living in.

Confused???

If you move back to the UK with debts elsewhere in the world and are contacted by a collection agency here in the UK, they can:

* Chase you for payment.

* Take you to court.

* Obtain a CCJ (possibly)

* Make you bankrupt (possibly)

If they are threatening CCJ’s and bankruptcy, it will be the court’s decision on these matters.

But it does not change the fact they can collect the account.

You however, have options as well. You can make use of all the debt management and insolvency options we have in the UK to deal with the account.

After a Period of Time Debts Are Forgiven

Another thought or myth that is actually true, but once again with some caveats, is that debts can be forgiven, or drop-off after a period of time.

What is being referred to is a term called Statute Barred.

What this term means is that if there is no contact between a creditor and the debtor for a period of six (6) years, an account can be Statute Barred or no longer owed.

This time frame ties in with how long accounts stay on one’s credit history, six years. Accounts drop off your credit file after six years.

The question and issue becomes, “contact” having no contact with a creditor.

You may move, and you may not contact a creditor for six years, but what if a creditor makes attempts to contact you?

They send notices to your old/previous address, emails to you, and you ignore or do not receive them?

This can be a bit of a grey area when it comes to the six year period.

However, again after six years if there is no contact, an account or debt can be said to be no longer owed.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
 
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”https://www.paydaybadcredit.co.uk/direct-lender/” data-mce-href=”https://www.paydaybadcredit.co.uk/direct-lender/”>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”https://www.handbook.fca.org.uk/handbook/CONC/4/2.html” data-mce-href=”https://www.handbook.fca.org.uk/handbook/CONC/4/2.html”>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”https://www.gov.uk/county-court-judgments-ccj-for-debt” data-mce-href=”https://www.gov.uk/county-court-judgments-ccj-for-debt”>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.