Your Silly Roommate Could Ruin Your Credit Score

Ah, the first financial expenses of your first independent living situation. Distribute the invoices with your new roommates, deciding on a decent broadband package, participating in the purchase of the vacuum cleaner. Is there anything sweeter than the first glow of responsible adulthood?

Then the administrator overwrote you. Your Forsaken Roommate is spending his entire student loan on a PS5. Your friend drawing on the Monzo pot housing tax to supplement his Coke habit. The cost of water bills you didn’t know about was one thing. And although these circumstances can be a huge source of stress in the short term, they could also have an impact on your credit rating in the long term.

According to a 2021 study by Compare The Market, almost half of 16-24 year olds don’t really understand what credit scores really do. VICE spoke with experts to find out if your credit rating really matters, what you can do to improve it, and if your financially useless roommate has been shitting all over your future.

What’s a credit score, anyway?

“A credit score is basically a number that reflects your credit level,” says Jayna Mistry, senior public relations and communications manager at ClearScore, the first company to launch a credit check app in the UK.

“What’s really important is actually all of the information on your report. Suppose you have a credit card with Lloyds: When you use your credit card, they will report to the credit reference agencies how much you used, if you paid it off, or if you missed payments. ”

Basically, this is the information that future lenders like banks will look at when deciding if you are a trustworthy person or full responsibility.

What if I have a bad credit score?

“We have this tendency to say ‘good’ and ‘bad’, but we’re actually talking high and low,” Mistry says. “Someone 18 years old is new to credit, and they may have what would generally be considered a ‘bad’ score, but that’s only because they’ve never used credit before.. “

Whatever the reason you have a low score, she continues, “it could prevent other lenders from seeing you as a credible borrower, which would affect your chances of getting a good mortgage rate or decent financing options. in the future “.

It’s easy to think, “whatever, I’m years away from buying my own home,” but your credit score is more influencing than your future mortgage. Say you need to cover an unexpected expense, like packing your boiler, or you want to borrow money to buy a car. Having a low score could limit your ability to get a loan or credit card. Want the new iPhone under contract? Businesses may turn you down if you have a bad credit score. In short, it’s not just about being able to buy a house in the near future.

How can I check my credit score?

“A lot of people may not know they have a credit score to begin with,” says Sho Sugihara, co-founder and CEO of credit company Portify. “One thing to know is that your credit report is a statutory right and you have access to it, free of charge, regardless of anything people are trying to sell.

The Americans have a regulator called FICO, but we have three major credit bureaus here in the UK: TransUnion, Experian, and Equifax. You can check your credit score for free at Karma Credit for TransUnion, ExperianExpert for Experian, Clearscore for Equifax.

“In terms of utility, there isn’t much of a difference,” Sugihara says. “There are a few instances where a mortgage lender may not look at your Experian credit score, but [another] might look at your TransUnion score, or another credit assessment team might look at all three – but they all do essentially the same thing.

Can something or someone else affect my credit score?

“Credit checks these days are about the person – you – not the people you live with, even though they used to be,” says James Jones, consumer manager at Experian.

But, he warns, “someone else’s information can enter the equation if you’ve linked credit with them. Suppose you have opened a joint bank account with people you live with, to facilitate paying bills. If that bank account is overdrawn due to the actions of any of the account holders, it will obviously hurt you. “

More importantly, according to Jones, “Having this joint account will also show a link on your credit report, so if you are applying for credit in the future just on your behalf, the lender can also view other people’s credit reports.” people. If they have had serious financial problems, it will also leave a bad impression on you.

What if you are the responsible roommate responsible for paying your apartment’s utility bills on your own account? Your utility company may also report any missing payments to credit reference agencies, which in turn will affect your own credit score.

What can I do about it?

Besides making sure your inane roommates contribute bills on time, Jones says that “one of the things we say to do when you check your report is look at the section we call” financial associations. “

“It’s basically a list of everyone you’ve bonded with in the past,” he explains. “This can include roommates if you have purchased joint products, but more often than not they will be ex-partners or partners.”

The way to solve this problem is to “contact the major credit reference agencies – Experian, Equifax, and TransUnion – by going to their websites, in the contact section and requesting what we call a ‘financial dissociation’.”

“You just need to provide the other person’s name and address and say you are no longer related. Assuming we don’t have any proof of an active account in both of your names, we’ll break the link and it’s normally that easy.

So how can I build my credit score?

Everyone interviewed recommended registering to vote, as this will also put you on the voters list, showing lenders that you have a fixed address and therefore are trustworthy. (And don’t forget to cast that vote once you have it.)

Services like ExperianBoost Where Portify, which Sugihara co-founded, sends positive data to the credit bureaus – phone bills, direct debits, or whatever else they might have overlooked – to improve your score.

Jones says taking out a credit card and paying it off every month could be beneficial, but cautions that you need to “make sure you think about it carefully and make sure you have a plan to pay it off.”

It’s easy to get intimidated by all of this, especially if your score isn’t exactly great but information about missed payments, bankruptcy, or county court judgments (where you have to go to court for your debt) are cleared after six years. And next time, filter your roommates a little better – or at the very least, avoid setting up a joint bank account with them.


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