An Uncharted Past 'Leads To Future Without Credit'

Most people in the country have a credit card, personal loan, mortgage or other type of finance; we need this to live our lives. However, there are still many people out there who have none of these things, while that may seem ideal to those of us struggling to make repayments it may not be as great as it seems.

New research has indicated that a person without a credit history may find it harder to borrow money or make particularly large purchases, it has been claimed. According to Experian, those without a well-documented financial background are a problem for lenders as they do not know how reliable they are.

Usually, money institutions would rely on the electoral roll to assess such matters but, as less people are voting today, this method is not as useful as it once was, it added. And the consumer affairs boss for the company has stated that lenders act more favourably to those with a charted monetary past.

"Lenders do like that proven track record and it can be difficult to get going if you've just turned 18 or moved to the UK from overseas," said the expert.
It’s almost like these people are invisible to lenders. They cannot see what they have been doing and so cannot make a judgement about their reliability. Banks and other financial institutions like people to fit into their rules and people without a credit history just do not fit.

This means that if you have no credit history you will be less likely to be able to get credit in the future. So if you have been living with your parents and diligently saving for a house deposit, staying in and not spending money unnecessarily then you may find that you cannot get a mortgage when you want one.

The best advice is to get some credit early but keep it small; perhaps a loan to buy a car or a credit card which you pay off every month.

If you would like to know more about credit why not ask AnswerBank Business and Finance.