Credit Ratings and How to Get Credit

by schemedemon

Credit Ratings & How To Get Credit

Living in a capitalist country, the message is pretty clear – “If you don’t live for money, then you can’t have a life”. Given that most of the population do believe that money is the one big aim in life, it comes as no surprise that most of us attempt to live beyond our means. Products which would normally be out of our reach are advertised with finance offers, such as cars and furniture. When you’re told that you don’t have to pay for your chair for a year, it becomes more tempting. Whereas people used to only buy things they could pay for with cash, nowadays we are told that we don’t need the money in our pockets to live our desired lifestyle.

So companies lend us money. We have mortgages, loans, credit cards, store cards, finance deals, contracted mobile phones and other types of credit agreement. Living through these systems means that you will receive a lot more mail, have a lot less money when you get paid, but who cares? You could have a BMW, a widescreen TV and a house with a pool in the yard. So this is a system that favours the sucker, that consumer slave-to-the-wage inside each and every one of us. We all want a ‘cool’ lifestyle, even we don’t earn enough money to legitimately live that lifestyle.

What happens, however, if you break your leg, fall pregnant, get fired or just need some time off work to study? You need a job to borrow money – so what happens when you lose that job and can’t pay it back? What if you’re a dumbass and never pay what you owe the companies? Everything is recorded. Trust me. They know about your late payments, but they don’t care if you lose your job – you’ll owe them more in the long term.

The system works like this. Every time you take out a credit agreement - that is, having access to more money than you actually possess, even an overdraft – the exact details are sent to a credit reference agency. You cannot enter a credit agreement without first having your credit history checked – you give your address and your name – and that address is listed. If there is no previous history (of your name at that address) then the first credit agreement you enter will affect subsequent credit checks.

If your first credit agreement should show any signs of missed payments, and if it is your only credit agreement, then you will not be able to enter any more credit agreements until your rating improves or is erased. How long do you have to wait until this record is erased? Well in the UK it is a period of 6 years before the credit reference agencies ‘forget’ about any particular agreement. When you enter a credit agreement, you promise to play by their rules and give them every penny you owe them, on time. The occasional missed or late payment will not condemn you, unless it is the only credit agreement against your name.

In my case, my first and only credit agreement was a contract mobile phone. When I was 18, I wanted a Nokia mobile phone, and got a contract which was £15 a month (22.50 Euros) plus telephone calls. I quit my job after a while, to concentrate on my college work to get into a good university. I worked to try and pay off my outstanding debts to the phone company, Orange, which eventually totalled only £105 (157 Euros). I was threatened with court and paid the debt two days later than the initial deadline (6 months after first non-payment). What I didn’t know was that every month I didn’t pay, there was another ‘black mark’ against my name.

I am now a student at a good university. When I was preparing to go to university, I applied for a student bank account with a credit card, chequebook, overdraft and free train discount card. The application was rejected. I could not understand why. When I learned it was my bad credit rating, I obtained my credit report from a credit reference agency. I learned, to my horror, that my mobile phone bills, just 6 missed payments out of almost a year of having the phone, destroyed any chance of successfully applying for a new bank account. I can now only spend money I own. Perhaps this is a good thing, but in this country, it is hard to pay for things without access to a credit card or chequebook. It is certainly not easy being a student. So what can you do to avoid credit ‘blacklisting’?

Remember, there is no credit ‘blacklist’. Your name is not on a ‘do not lend’ database – your home address is all they need to find out how well you have behaved with other credit agreements. And it’s all true. If it is not true, you can easily amend your credit history and then re-apply for your loan etc. The best thing to do is before you miss any payments on your first ever credit agreement, i.e. phone bill, gas bill, credit card, store card – is get another credit agreement. The more good records on your credit history the better – and this potentially involves borrowing more money. So how could another credit card possibly mean good news?

Having a credit card improves your credit rating, particularly if there are no missed payments. If you get a fee-free credit card, and then destroy the card itself and never make any transactions, this will still bolster your credit history. It costs you nothing.

My credit history is fucked – how do I get credit now?

Remember that credit history is a rudimentary system. It works on full name and home address. Even if your name was ‘Zebedee Rainbow Starbucks’ they only have postal addresses to check. There could be another Zebedee Rainbow Starbucks and they can’t prove that it’s you without your previous addresses! They will check any address that you give them.

If you tell the credit lender that you have lived in another country since before you turned 18 (the minimum age for money borrowing) and then give them an address you lived at before your credit trouble, you are telling the truth as far as they can check. Then you will need to explain where you lived during your last credit agreement; the addresses on your credit history obviously can’t be used, so you need an ‘alibi’.

In my case, having moved to be closer to university, I didn’t inform anyone that I had moved. The credit reference agencies do not know where I live now. Give the address of a relative. Your living there will not have been noted in the postal files, so they cannot check it. If they can’t find your credit history, and you have a regular job, you are closer to credit approval.

They will also look at bank statements – these prove income and that you have an account already. Ensure that your statements do not give an address that would expose your bad history of credit – so before you apply for credit, inform the bank of another ‘clean’ address and demand that they send a statement there. It would help if this is the address you told them was your current home address – and this will be where your new correspondence will be sent too! Banks are wary of post office boxes – do not give an address like “PO Box 167, Nowhereville” because they will think you are a money launderer! As you do not live in a postal box, you couldn’t use it as a residential address anyway.

Think about the addresses you give – university residences and mental homes cannot be checked for credit agreements as they are privately owned and the details of residents are rarely known. Relatives’ houses are a good bet because there will be no proof that you ever lived there. Ever.

Is this illegal?

We’re living in capitalist times, fellas. Laws are passed every year to protect the companies who are making money for the government. It is illegal to lie to the bank - if they can prove it. But come on – you’re just getting a godamned bank account, you’re not exactly smuggling coke in your ass. It’s a paper crime. You are legitimately a person. You are at no point lying about your name, age or identity. Why do they deserve to know everything about you anyway? This isn’t “1984” just yet. You are just covering your ass.

What happens if this works and I get a new credit agreement?

You will have given them an address at which there is no prior record of you. There will be no way they can magically find your old credit history. You have a second chance to make a new history, starting from the address you have just given them. Now be a good little capitalist and pay them what you owe them, when you owe them.

Remember that with self-control, you can live without credit. Since my credit rating hit the fan, I haven’t been able to borrow money. I can only spend money in my bank account. And I suppose it’s good that I can’t get into debt. People only used to spend money they actually had – but nowadays, living without credit is actually MORE expensive.

For example, a pre-pay mobile phone, say a new Nokia model, could be £250 (375 Euros) and the phone call charges are very high, with few discounts. If you agree to a contract mobile phone, you get lower call charges, free calls everyday, free text messages, and the brand-new-model Nokia you wanted is totally FREE! Try telling me that this is not pressure to spend money you don’t have! The consumer in all of us says; “I want the phone that can email pictures of my ass to my friends!” The alternative is the cheap pre-pay phone (£40 = 60 Euros) with a black-and-white screen, which has a choice of 3 ringtones, all of them annoying as hell.

Another example; if you rent a house, the monthly rent payment is perhaps twice the amount you would pay on a monthly mortgage repayment. Some landlords even check your credit before you can rent a house! So again, borrowing money is advocated by those with the control.

It is a sad way to live, but we are all in a world where we are TOLD every day, to live with money we don’t earn and spend money that we can’t afford to lose. Because the world spins on a financial axis, the corporations are actually running our lives. When was the last time you went to town and didn’t see an advertisement? Without advertising we wouldn’t have television (with the exception of the BBC, which is funded by TV licences). We wouldn’t have big football matches. We certainly wouldn’t have this endless pressure to borrow money.

You want to survive in a capitalist state? Well, you either agree with it or you don’t. Me, I hate the greedy fucks that run and ruin my country. My parents, who have lived by the system for 30 years, do agree with it. They have to live for money – they have 4 kids. Either way you look at it – you can’t ignore the system. It’s too expensive!

schemedemon 2004