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The fear factor

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CreditWise is a new tool from Capital One that gives you free access to your credit score and helps you understand the factors that affect it. Find out more opens in a new tab

June 2017Capital One Essentials

I'm someone who handles tangible things really well. So if faced with my Mum's cottage pie, I’m aware of the homely joy and happiness that sits before me. I understand ketchup and brown sauce and if faced with a sale rack in Topshop, I'm all over it like a frenzied mosquito. Credit, however, gives me the fear. (To be honest anything that might at some stage involve a formal-looking envelope increases the furrowed brow).

My approach on these seemingly intangible (almost invisible) things is a resolute head-in-the-sand approach. If in doubt, channel an ostrich.

But this head in the sand approach, while effective at the time isn't going to see you through the long game. I think my biggest underlying fear, though, has been in getting red marks. Whether it's an overdrawn account or being rejected for a credit card, that stuff starts to take its toll– especially if you decide to have a family. "Sorry darling, mummy can't buy a house because she splurged all her 20-something cash on Topshop frocks willy nilly and – lenders think she's a 'big risk.'"

Cue Capital One - a company that I have teamed up with to help dispel the myths and clear up the jargon opens in a new tab around credit. They have an arsenal of tips and tools that helps you navigate this financial jungle without ending up with red marks all over your finance homework.

Perhaps the tool that grabbed my attention first was the Quickcheck opens in a new tab eligibility checker that can do a pre-check to see if you'll be accepted for a Capital One credit card without affecting your credit score. This is your chance – without a trace of red mark being left behind - to know where you stand before you decide whether or not to apply. Consider this a starter – it's a litmus test of whether you can afford the main course. No-one wants to ask for the bill at the end and not be able to pay; the restaurant shame is the equivalent of a red mark against your financial name.

And this isn't a 99% guarantee that you will – or won't – be accepted for a credit card. Capital One provides 100% certainty on whether you'll be accepted or not so you'll know exactly where you stand.

But why should you even care about the red marks on your credit file? Why not channel the ostrich; that magnificent bird?

Well, there are a few reasons why you should care about your credit score and keeping it healthy. Phone providers will usually do a credit check before handing you a new shiny phone. If your credit score isn't up to scratch, they could turn you down - leaving you with Pay-As-You-Go as your only option, and a mark on your credit report.

It's also not uncommon for landlords and estate agents to do credit checks. A healthy credit score could save you from having to pay an additional deposit up front, or from having to ask a family member to sign as a guarantor on your behalf. Let's be honest, no-one wants to ask mummy and daddy for help with adulting aged 30.

Then there's the bricks and mortar. Recently lenders have become much stricter with their mortgage lending criteria, and your credit score plays a very big role in your chances of being accepted. We're talking actual roof over your (and your kid's) head here - perhaps that is something a little more tangible to get my head out of the sand for?

Top tips from Capital One for taking control of your credit score:

  • Know what your credit score is opens in a new tab – if you know where you stand, you'll know whether you need to make changes to improve your score or not, you can find your score at the three main credit reference agencies Experian, Equifax, TransUnion, or you can try CreditWise opens in a new tab from Capital One.
  • Check your eligibility before you apply for a credit card, Capital One's Quickcheck opens in a new tab tool will tell you with 100% certainty whether you'll be accepted before you apply, without affecting your credit score.
  • Make sure you're on the electoral roll. Lenders use the electoral roll to confirm your identity. If you're not on it, it's harder for them to do so. Registering is free and takes less than 5 minutes. Search 'register to vote'.
  • Pay your bills on time by Direct Debit. Missing a payment can affect your credit score for up to 6 years. Setting up a Direct Debit is a simple way to make sure you pay on time, every time.
  • Don't go over your limit. If you have a credit card, always try to stay within your credit limit. Lenders typically see this as a sign that you are able to manage your finances responsibly. You'll also avoid any extra fees.

Capital One's eligibility checker Quickcheck opens in a new tab lets you know where you stand before you decide whether or not to apply for a Capital One credit card and won't affect your credit score. If you do decide to apply, the Capital One Classic credit card features a 34.9% APR representative variable rate.

This post was created in partnership with Capital One who I will be working with to help cut through the confusing world of credit.