Top Myths About How Your Credit Affects Your Family

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With living costs around the world rising especially in capital cities such as, London, knowing the truth about how credit can affect your family is important. Whether you are looking to take a loan out for a new home or apply for credit cards with greater credit, knowing your credit score – and how it affects and doesn’t affect your loved ones – is crucial to creating a financially healthy household.

If you have recently received your credit check to find out more about your finances, you’ve taken a very important step. If not, there are many online resources available, including, that can help you determine your credit score. It doesn’t end there as you need to understand what goes into the credit report and what impact it might have for your future and the future of your family. Let’s debunk some of the common myths around your credit report:

Myth 1: Family and friends living in your home can harm your credit rating
Once was the case that lenders could check the credit reports of other people living at your address in order to decide whether or not to offer you credit. However, this no longer happens. Instead, your credit report has a section listing your financial associates such as those you where you may share an account or mortgage with others. Lenders can look at this information on your credit report when assessing your credit viability. This means that if your partner has a poor credit report it could affect your chances of getting the deal you wanted even if your personal credit report is near perfect. However, do not despair as you can make sure that you don’t get penalised by checking that the list in your credit report is in fact correct. It is also a good idea to get any financial associates you may have to check their own credit report before you decide to make a new application.

Myth 2: You have been blacklisted which is why your credit rating is poor
Although rumours and myths may suggest that such a blacklist exists, there is no such thing. When you apply for a credit report it does not rule you out because of the street or estate you live on and ignores factors such as gender, religion, race and ethnicity. The reason behind lenders asking for your previous address is because continuity plays an important part in determining your credit history. By providing your previous address, lenders are able to determine how well you have managed your finances over time, as well as predict how you may act in the future. Another factor that you may be wondering why it is included on your credit report is whether or not you are on the electoral register. This is only used as a precaution against fraud as lenders can check if you are who you claim to be and live where you have stated you live.

Myth 3: Items in your credit history stay on file forever
If you have just started a new family and are looking to move to a new house, get ready for an extremely expensive process. However, don’t worry too much about a few missed payments when you were in University, for example. Your credit report is designed to give lenders a good picture of your recent and current financial position. Therefore your past financial behaviour when aged, 21, is unlikely to have any relevance on your behaviour and actions today. Most information about your credit history is therefore held for usually between three and six years.

When starting a family or looking to move into that new family home, your credit report becomes more important. If in doubt, consult your lender. Make sure to research the difference between myths and the truth – as you can see there are many myths that are clouding our view to a clearer financial future.

Written by Cass Brooks, UK blogger who writes about personal finance, fashion, and living a frugal lifestyle. When she’s not writing for her blog, Clever Little Buttons, you can find her knitting and checking out the racks of vintage clothing

Lotte xo 
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