These days, many Irish consumers will rely on credit in some form or another, whether that be a loan from a financial institution, a PCP for a car and so on. When assessing an application, lenders will look for information that will assure them that you can repay the loan, and that you are likely to do so. When signing mortgage or loan applications you’re giving the lender permission to seek a credit report from an agency like the Irish Credit Bureau (ICB). A bad credit rating could be caused by missed repayments or failure to pay off a previous loan, and could see your application rejected.
Credit reports include information on your name, date of birth, addresses, current lenders and loans, or those active within five years, any repayments missed, any loans that you failed to clear off, loans that have been written off, as well as any legal action taken against you by a lender.
Seeing your rating
Anyone who has ever borrowed money should have a credit rating and, under the Data Protection Acts (1988 and 2003), you have a right to access all information about you that is kept on a computer or ‘in structured manual files’. In order to find out your current credit rating, you can contact the Irish Credit Bureau. You can apply online, download a form, or contact the ICB on 01 260 0388 and request that a copy of your credit report be posted to you. A fee of €6 applies for each report. The best score you can get is 850 while the worst is 300. Don’t forget, if you spot any errors you can also apply to have your record corrected.
Building it back
If you’ve got a good credit rating then taking steps like always paying credit card and loan payment bills on time can help maintain this positive score. However, you can also take steps if your credit score is on the lower side. Make sure to pay your bills on time and budget so that these are the first things to be paid with each paycheck – no matter how small it could help with your record.
You should also consider clearing out any outstanding repayments on a loan – if you can’t do this immediately then your lender may be willing to remedy the situation over time. Speaking to the Irish Independent earlier this year, Experian’s head of consumer affairs, James Jones, said: “Such an arrangement will look better than a situation where missed repayments are clocking up.”
Other good habits to get into include avoiding excessive applications for credit, and maintaining good debt management practices.