Mortgages, loans, and credit cards. Most, if not all, of us at some point in our lives will need to apply for these things. But what do you know about your credit score and what lenders are actually looking for in a good credit score? In today's episode we are joined by Richard Catlin from checkmyfile.com who share with us his extensive expertise in credit score. Tune in to find out what secrets he has to share.
A good credit score and accurate data behind the score is important when applying for mortgages, loans and credit cards. But do you check regularly to make sure that the data the various credit agencies are holding about you is accurate?
Our guest on this week's episode is Richard Catlin from checkmyfile.com. Checkmyfile is the UK’s most detailed credit report that checks data from Equifax, Experian, TransUnion and Crediva. Richard has extensive expertise in credit scores and what lenders are actually looking for. Tune in to learn about the best actions you can take in order to manage your data efficiently.
Resources Mentioned In This Episode:
>> Checkmyfile [UK’s Most Detailed Credit Report] - Free 30 Day Trial
>> Join the WealthBuilders Academy
>> REGISTER HERE FOR FREE RESOURCES ACCESS
If you have been enjoying listening to WealthTalk - Please Leave Us A Review!
The purpose of wealth torque is to educate, inform, and hopefully entertain you on the subject of building your. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.
Welcome to episode 126 of wealth taught. My name is Christian Rodwell, the membership director for wealth builders. And I'm joined today by our founder, Mr. Kevin, Chris, we're doing it the old fashioned way face to face. Yeah. We're sitting in the office in the farm in Sussex and we're having. A bit of a business meeting to get today and we're having an old chat now and we thought we'd do a podcast.
We got a little bit of time left over at the end. Yeah. We've got the hardware out to record it. And, um, yeah, this takes us back to the early days, but today we are paying attention to something that we should be checking regularly. And I certainly do. And that's our credit score, Kevin? That when was the last time you had well, Chris, I think, you know, I'm a net lender.
I lend my money. I don't borrow very much. I don't really pay too much attention, but look, it's a serious subject because if you're looking to build your wealth, almost everybody will build a wealth through some form of leverage. And we talked about leverage before in many episodes of, uh, wealth talk and including in the nine-step roadmap as well, you know, we'd step.
It's been a long day. Goodness. So the whole concept of leverage is making more for less. If you can find that you can borrow money from somebody at a lower rate, and then you can get a higher ROI. So you get a higher rate than you making money, as long as you do. So understanding that it cuts both ways.
But in order to do that, usually you borrowed money from a third party. And when you borrowed money from a third party, they want to know more about you. And that's the essence of today's podcast. Yes. And, uh, there several companies out there, but today we've invited the marketing director from check my file.com and that's Richard Catlin.
And Richard is a man who really knows. The details behind the data. And he's going to share some of those with us today. So why don't we head on and have listened to that conversation? Richard, a warm welcome to off self-talk. Thank you, Chris. Nice to meet you. Yeah, no. So really good to have you on look forward to the conversation today.
I think it's narrow that we're going to provide a lot of insight to our listeners and the topic today is really around your credit score, but understanding the data behind it. And, uh, and we know that, you know, consumer awareness of credit ratings says it's on. And the important role that they can play.
And, um, you know, much of that is centered around what we know is credit scores, but, um, as you'll be sharing with us today, the number itself doesn't necessarily give the full story. So before we dive into that, perhaps it'd be useful for Pitt to understand, you know, your role within the company. So check my file.
We've been, we've been involved in credit scoring, spin. Uh, over 20 years now. And I'm, I'm proud to say that I've been a part of that for, for almost all of it. I was, I was not quite first through the door, but I've, I was one of the first recruits here. Um, we were the first company to put credit scores online in the UK.
Um, we've, we've kind of evolved since then. Um, I've managed to work my way through, and now I'm one of three core directors here, but we've got a great team under us, uh, helping UK consumers really understand. You know, the, the world of credit score and what it means for them, because as a nation, we love credit, we really do.
And so it's increasingly playing a big part in our data. And today we're going to dig deeper on the distinction between, you know, where the credit score is used directly for a decision and where it's given us a kind of easy to understand indication of credit worth, you know? So I think let's begin at the beginning and let's just maybe if you can break down, you know, what is a credit.
So, I mean, credit scores, generally they get a bit of a bad rap, but as a, as a fame credit scoring is a, is a positive. And we still look at it like that because what it's designed to do is help lenders make better decisions, more responsible decisions. And, and what that translate to then is that by taking on better customers or more appropriate customers, the cost of product for all of us is kept down because it means that they're taking on less risk, less bad debt, because you can imagine that if, if lenders take on any.
In amongst that there would inevitably be people who, who default and don't pay it back. And so the cost of lending would have to increase as a result. So by being more responsible, it keeps that cost down in terms of APRs, if you want to keep it simple. Um, and over the years, credit scoring itself has been proven three better than humans.
Yes, it's better. It makes more informed decisions and fair decisions than a typical bank manager. You might, as you might've looked at. 2030 years ago when it was literally a person with a form and a piece of paper. And they, they very often knew you as a person, but it's less subjective. So I think it's, it's more scientific.
It's proven to be good. And really, as a, if it's done properly, we should, we should embrace credit scoring as a positive thing. And everyone in the UK of what point do you get a credit? So, again, it comes down to whether you get a number or not. So realistically, once you become 18, you can become a credit active you're allowed to apply for your first phone, your, your first proper car that, you know, isn't one that you got when you were 12.
So really you become credit active at 18, and then it'll vary from person to person as to what happens. Then lots of people might go to university, get their first overdraft, for example, and straight away. You're building a history then, which is what it's all about. You start to establish who you are as a borrower and, and as we'll probably touch on in a moment that starts to establish how you'll be viewed in the, in the, in the future, because the past is, is generally a very strong indicator to the future in terms of how you behave.
Now some of our listeners, they might be familiar already with the names, Equifax, Experian and TransUnion. CRA diva is another one. So what's the relationship between check my file and those names. So we've, um, we're very unique in the UK and that we have a direct relationship with each of the agencies in the UK.
So. Equifax Experian and TransUnion who share a credit account information. So that, uh, that includes everything about how you pay your bills, your mortgage, your phone, all those things. And then Keira diva, who are probably a less known agency, but still holding important information about who you are.
They, they, they share information on the electoral roll, for example, and they have bits and pieces that aren't included elsewhere. So we take their data directly from each of those agencies. Assimilate it put it all together into the same format and show you as a consumer, what it looks like you can go and get them all separately, obviously, but each of those agencies shows it in a different format that would be used their own score.
Uh, you know, that, that, that magic number that we we're talking about now. So really, if you went away and got each of them separately, you'd see different sets of data, different numbers, and you might not know how each one compares to them. So that's, that's our whole purpose really is to show you. Easy to understand in one place line by line.
How do I look? What does it really mean? And the reports that you provide are very extensive. You know, they're very visual. They're very nice and clear. And clearly, you know, you as a company have focused a lot of time on presenting that data in an easy to understand. It's a huge thing for us, because we know from experience that credit files, credit reports, whatever we want to call them, that's a huge amount of data in there.
It, it can be, it can be a bit overwhelming. Really. You look at, if you look at statutory file, for example, which is what existed before we do it, it's a print out. And it, it looks like binary code is full of ones and zeros and, and you have to reference, uh, tables to find out what a D or a unit. Whatever it might mean.
And so a lot of it was kind of demystifying it, putting it in layman's terms for people to understand and really making it digestible and less scary. People typically have this kind of view that if I stick my head in the sand, it might all be okay and bad things will go away. And it's the opposite. It's about embracing it, logging in and we constantly get feedback that people say, wow, Yes, this is, this is really like a light bulb moment.
I've seen the data for myself and I actually understand what it really means. That's huge. Yeah. It's important for us. Yeah. So let's, let's start taking into that then Richard, and actually look at why it's important to understand the data behind your credit score and what the lenders are actually looking for.
So, you know, where should we begin? So I think what, you know, you're going to be judged really on all sorts of suffers and it could be insurance. It could be, it goes from something like that. Something as small as paying your insurance monthly on your car or your home through to actually getting your own home and getting a mortgage lenders.
As I said, lenders love stability. They, they, they know that if you're stable and you pay your bills each month, then there's a good chance you're going to do that going forward as well, because ultimately they care about what sort of, where are you going to be for that? Um, they want you to, to pay him, to pay your bills back.
So really, as a consumer, you have to understand that what you've done in the past will be visible. Typically accounts would stay on there for say six years and then they would drop off automatically. So it's quite a long time. The information is going to be visible and be used by lenders. Um, they operate a assistant called reciprocity, which means that when they share information, then they can take information.
So not just any, any old company out there can access information about you and not judge you on it. They have to be part of this system. They, they, they put something in and they can get something out. So a lender doesn't have to ever have a relationship with you personally, in the past to make a decision they can use.
You know, you can use specific examples that Barclaycard, for example, might judge you on how you might've paid your American express card in the past. So they're looking at that and they're constantly assessing what, what sort of borrower you might be. Um, and each lender has a different appetite. Not all, not all companies out there want you to be squeaky clean and have a perfect record because you know that there's clearly markets for those people who may not have managed to pay their bills.
It's so much in the past. And so there's companies out there designed to meet their needs. Um, so really it's about demonstrating what sort of burrow you are, uh, and what sort of borrower that, that lenders are looking for. This is matching the two. Um, and I think certainly perhaps people at the earliest stage of their sort of wealth building career or in the younger years, you know, might think that because they haven't had credit cards because they haven't had debt.
All of these things are good, but actually, you know, you perhaps want some of that. Uh, elements to build up your credit rating. Yeah. It's typically we would typically call it a thin file. So it's one way you might be registered in the electoral, but other than that, you've, you've managed your money really, really well.
And you know, you, you think, well, I've never had to borrow. I've only I've lived within my means I've used cash, but there comes a point for everybody really, where you have to borrow and you know, a house is a great example for that. It always is where, you know, you look at a mortgage, people, look at mortgages very differently, I suppose, to.
Um, you know, short-term finance cards for purchasing TVs or whatever it may be, and each to their own, in terms of that, that's, that's totally fine. But if you are looking to, to use credit in the future, in the form of a. It is going to be a case that you need to establish a credit history, and that doesn't have to be a horrible word that can literally be a card that you keep separately.
You might use it for petrol purchases or shopping. You clear the balance in full every month. You know that it's not hanging over you and you're not going to get into difficulties, but at the same time over, over that period, you're building your credit history and you're demonstrating that you are a good borrower.
So it's, I guess it's important to take a long-term view of, of credit and how you use it. Use it responsibly. Um, but ultimately is, is a good thing. I think it can be a real positive and. Simply just looking at a number. It doesn't really tell the story. So even someone who might be on a, you know, a 9, 9, 9, or, you know, full, full green bar, that doesn't really what does that really mean?
Because they're just to make it digestible. Really? We, we show a credit score on shut my file. We caught you your check mock trial, judge my file credit. So we take all of that information and we interpret it as to how we think a typical lender would look at you and each of them, each agency, or each company that shows you that information is trying to do the same, but lots of them will use a different scale.
So you might see 250 to 750 or nought to a thousand and they can be all over the place. And really it's just a guide. You should use it. Have a look, see what it is, but what you really need to do is just dig, dig into that data at the end of the day, it's your information that somebody else has collected and shared and it's been put together.
And so you really are the only one who knows what that should look like. So did you really miss that late payment or did you really open that account or are you really related to that? Only, you know, the answers to those questions and the data is where that lives. And so by, by really looking at it, going through it carefully, you can make sure that everything is as it should be.
And that it's a fair portrayal of you as a borrower and as a person, because otherwise it will just stay there unless you challenge that information. It will just stay the same until it falls off. So by checking the actual data itself, you can make sure it's all correct. And should you come across something?
You can do something about it. I mean, I think we'll come to that in a moment, but errors do happen occasionally and you won't see those errors in the score. You may see the errors in the data. Yeah. And, and do all the agencies updates every 30 days. Is that a regular pulse? It depends on the, the relationship they have with the lender or the organization.
So some organizations might pass information more frequently, typically every month is when it will go across. So in the olden days, it was literally a, a tape that went across to an agency and was uploaded. Now technology being what it is, the information can come across much, faster, much easier. Um, but yeah, it'll go across.
Those relationships differ as well, which is key. I think we've checked my file as well. You'll see that if you look to at your full file, you would see that certain you might have your mortgage. For example, it might be reported slightly differently because not all of them have updated. So you might see that one of them would show your, what you know, to be your most recent balance.
And another one might be slightly later in updating the information so that the balance might reflect, say one less repayment differences will occur. According to how the information has come across in the speed at which has been updated. Um, so let's look at why it's important to be regularly looking and hence why the check my file report is so good because it makes it so easy to check for these errors.
A lot of our listeners are property professionals, Richards, you know, they're building their wealth, their business owners. So, you know, it's important for them to make sure that their credit is, is in the, you know, in the order it needs to be, and especially timing, right. Because they might be applying for mortgages or re mortgages and things like that.
So how'd you go about checking for errors? What are some of the tips perhaps that you might have. I think, you know, your, your audiences is a great example of, of why it's so important because our mortgage lender, um, they would, they want to know everything they possibly can about you and, and your past. So of those agencies, are there the three agencies that are going to be reporting account information, a mortgage lender with typically.
Go to two or three of those and look at the information that's there. So if you only checked one, for example, let's say you say you only go and check Equifax and the mortgage lender you goes to, that they check all three. Then there's a chance that there could be information that's different than the other two that you've not checked yourself that they'll see, but you won't see.
So you kind of, you think, you know, but you only know part of the picture. So it's really important that you. Like I said, go right through all of the agencies, see what each of them is reporting and make sure that everything is correct everywhere because otherwise, you know, you, you could find there a nasty surprise somewhere.
Um, and you certainly don't want that if you're in the property business, um, it could come down to things like the electoral roll, for example, each of them is updated separately. So you want to make sure that you're recorded at each of the agencies on the alerts were row. Okay. And if someone were to find.
Um, how, how can you go about helping them with that? It depends what it is, to be honest. Um, lots of it would relate on you'd look at it. And if there was something related to a particular lender, they're going to the lender is often the first port of call. You could speak to them, let them know that you've checked it and it's interactive.
And if they, if they can agree. Yes, it's been an error. They can contact the agency and on your behalf and get it changed if they disagreed or you going to run into a bit of a brick wall that can become a bit frustrating. Overwhelming credit is a very emotional thing. So what we do there, that we would have a team here, a disputes team that liaises with our kind of corresponding teams at each of the agencies.
And we'd send. Send the information across, let them know what's wrong and why, and then liaise with the customer as we go through the process of getting it updated and. Um, and that, that can vary. It can be things that are late payment that was recorded incorrectly. It could be missing information. Um, associations are a great one.
Um, and sometimes it can come down to the intricacies of reports and how they work. Twin's always a great example of this. I think where if you're a twin, you, you obviously share a data birth with your sibling. Um, and parents often have this very annoying habit of giving them. Children, the different names with the same initial.
So you might have twins and you call them John and James, and you can imagine then that 20 years later they might be Mr. Jason. They're both. There is Mr. J Smith with the same date of birth. They both lived at the same address that they grew up. And so there's all these links. And so to a lender, you can imagine that it's not improbable that their data could suddenly become.
A bit mix up unpicking that can be been, can be quite challenging. Um, but again, anybody digging in, could you find that that'd be something we could certainly help with? I mean, you can imagine that twins then they're not the majority, but errors like that are a good example of why you need that expert help from time to time.
I think you mentioned associations there. Um, and, uh, also consistency, right? So perhaps if you've moved address a few times, Or you might live in a flat and there's a, just a different way of spelling, the number and the house number little things like that could affect, you know, blenders, um, giving you, or, you know, They do so, so addresses, uh, I think we find at Scottish addresses in particular, they have certain formats that they approach.
You might be upper flat, left, or flat B. And you might not think anything of it, you might think, well, they use both versions and it's fine, but there are systems in place where lenders try their very best to try and find that information. But. You just need to be really consistent. So whether that's your address or if you become, if you change your name, you might get married for example, and then take a new surname and use two different versions.
It's quite possible that a lender might only bring back, say some of your data, and that can be as frustrating for them as it, as it is for you, because they want to see as much as they can. Associations are another great example. Just, yeah, I love this analogy that just because a relationship ends your association doesn't so you can imagine that, you know, you go for a mortgage and all of a sudden, an ex partner from 10 years ago is the thing that perhaps stops you getting that.
Not only is it frustrating that you don't get the mortgage you want, but it can lead some really quite awkward conversations at home with your, with your new partner as to why your extra, my non long time ago is still lurking there and causing these difficulties. It's a, not a problem. It's not a hard thing to get changed because you don't hold up financial, actual financial link with them anymore.
You don't hold accounts with them anymore, but it's frustrating and can be embarrassing as well. And I guess another aspect is just being clear as to the timings of when certain things are going to come on or drop off your report and how that might affect things. Absolutely. Yeah. Um, like information stays on there for very fixed periods.
This is quite linear. Clean in terms of when stuff goes on and when stuff should come off. But if you're planning ahead of time, if you know that you're gonna be applying for a mortgage in say six months time, and you could see that there might be something adverse on there that would come off in seven months time, it'd be crazy if you applied while it was still there, just waiting that little while until, you know, something that's likely to change.
But crucially, there is absolutely verify that it has come off because whilst it's expected to come off in say March 20, 22, Don't rely on it, check the data for yourself, make sure that that's happened. And then if you, if it's at all possible time, your applications for finance around that, to make sure it's there and it can work the other way as well.
Like we touched on other stuff. If she had a thin file, you want to wait six, 12 months before you, before you're making the applications. Because if you apply for a card and then apply for a mortgage, you've built no history. All you've got is an application on one month of repaying, your credit cards. So using those things to your advantage, making sure that you time applications, so they fit in with what your file actually looks like when the information you're going to be judged on and you'll stand a much, much better chance of being.
And that's a great tip there. So I guess to complete them, Richard, um, is there anything that we've not covered, which you think's important for people to understand and perhaps, you know, just to summarize best practice for anyone who wants to keep her a good check on that? I think for us so different people will check with different frequencies and we embrace that completely.
We make it easy for people to sign up, but crucially is easier to cancel for us. So you have a free trial, you can come in and see what's held about you. And we love to build these long-term relationships with our customers, but different people will, some people will check routinely every single month to make sure that everything's fine.
Other people dip in, maybe once a quarter. But it really fits your needs. And I think there may be that a lot of your lists. Fall into the, kind of the follow on whether they're regularly moving properties around and applying for lots of different products. It may be that that's crucial for them to stay on top of the information, but really finding that frequency that fits your lifestyle and your borrowing patterns.
That that's really, really important. Um, like I said, we embrace it. We've got customers that have been with us for almost as long as I've worked here and we've got other ones. Dip in and we see them again in a few years later. That's great. But really, I think only by understanding that it's your information and, you know, it's your data.
You need to just embrace it, check it and really understand what's there. And then if you do need a helping hand, then we're do. If you were more financially savvy, like a lot of your listeners, then I'm sure they'll, there'll be able to take the action themselves, but it's really seeing the data being able to act on it and adjusting it according to your own needs.
There's crucial. I think Richard, if anyone listening right now wants to go and check out one of those reports. What's the simple, next step. So, yeah, just visit, check my file.com. Um, so like I say, it's a really easy process to join. We would really hope that people would see the value, see the, see the depth of data.
If they need to speak to one of the guys here, it's a real person on the end of the phone, they're all professionally trained credit analysts or not call center staff. So helping hands here, they needed to, um, we'd love to be able to help them progress on, on their, on their journey, through, you know, especially as.
Clearly you have, uh, uh, a big need for services like yourselves and us. So we'd love to be able to build a relationship with them, but if not, then it's really easy to cancel that trial and we'll see them at some point in the future. Right. Richard. So, so thanks so much for sharing with us today now.
Thanks for your time and best wishes for the, for the future, with the podcast. Okay, thanks very much. Okay. So thank you to Richard there for sharing his insights around the, uh, the world of credit scoring. Before we take a look at some of those in a bit more detail, Kevin let's head on over to Trustpilot and, uh, have a flick for some of the latest reviews.
And one that's caught my eye this week is from Michael. Michael says a bright star in the murky world of financial aid. So the world of financial management advice is full of individuals and businesses offering advice. The problem is a large number. Do not have the depth of skills and expertise to add real value despite taking a fee to do so.
Thankfully, there is a bright star in this industry and that's wealth builders. So from the first phone inquiry, Uh, their supports may has been targeted, thorough and professional 18 months after hearing about SAS for the first time, I now have mine set up and a clear strategy as to how to make the best of it.
Both Kevin and Paul have worked hard to guide me on the journey, avoid pitfalls and ensure they understand what I am trying to achieve and impressive. Uh, you go Brightstar as well. You know, I've got to pay attention to the stars, but we also got to pay attention to our credit score. Chris, we have got to look at that data.
So what did we learn from that? Well, we learned obviously the errors can occur and if you don't keep a check on that, then those areas could crop up and cause problems. And especially. You know, in the world of property, like many of our members are, um, you know, just by going through making sure that, uh, you know, addresses, perhaps if you've been moving home recently that things have been updated.
And, uh, you know, I've seen that myself, you know, when I moved away and went to Portugal a few years ago, changed some addresses and, you know, a couple of those things needed to be checked on. So, uh, and also I've shared the same name pretty much with my father. So, you know, I did once see his name pop up on the report.
So, you know, uh, these points of family. Yeah. Well, okay. Anything that can help you and ease the way for you to be able to get access to the money that you want. You want it to be smooth? So the timing is often quite an important issue around that. Especially as people making a transition often from being, let's say traditionally, an employee into then working in business or working in property, which of course is a mainstay here in the UK.
And many people make that transition. Don't think about the need for maintaining that employability, for example, to be able to get more. And they create limited companies which have blessed have a track record. So the timing can be really very important around that. So yeah. Getting the information, right, absolutely.
Uh, checking your file. Definitely like so many things we ask people to check in the debit section, um, checking whether they own their home as joint tenants, as tenants in common checking that they've nominated their spouse or a loved one is a beneficiary. Of their life, life cover or indeed their pension at work.
So lots of things need checking and it's an important part of being a good wealth builder to keep an eye on things, because if they go wrong, You almost always get knocked off balance because you can't recover in time to do what you originally wanted by the time you get these errors or mistakes corrected.
Absolutely. And, uh, you know, I'd recommend everyone listening to a head to check my fault or common. You can try it free for 30 days. It really, really is a very good site. It gives a, it gives you a very good report of everything. So go and check it out and just make sure. You know, as it should be, and then it gives you the peace of mind, you know, to continue building your wealth.
Good. Okay. Well, uh, I think that sums everything up today. I think Richard couple of key points there, so, uh, we'll catch you same time, same place next week until it we'll be together then. So, um, until I don't know where you be at, I don't know where all day, but until then, CRISPR, Fred, I'll see ya.
We hope you enjoy today's. Don't forget that we are constantly updating our resources inside the wealth builders membership site. To help you create, build and protect your wealth. Head over to wealth builders.co.uk/membership. Right now for free access that's wealth builders.co.uk/membership. .