Credit for Paycheck

What Is My Credit Score asked:


What is my credit score is an important question to get answered for financial reasons. To know What is my credit score you will have to first understand What is a credit score. The credit score which is also known as FICO score is a concept created by Fair Isaac Corporation. Fico score is proprietary of Fair Isaac Corporation and hence the formula used to calculate the Fico score is under the wraps.

Credit score is a three digit number which defines an individual’s credit worthiness. Higher the credit score better is an individual’s credit worthiness and hence lower is the risk of lending to the individual.

From Bankers to employers many use credit score as a base to determine the financial risk. Hence it is very important to know how much is the credit score and try to improve the credit score as much as possible, though not everyone lends based on credit score.

Good credit score ranges anywhere from 825 to 650. Low credit score is from 575 to 650. Anything below 575 is considered as Bad credit score. For someone with a good credit score the rate of interest will be lesser as the risk associated is lesser compared with someone with a bad credit score.

Credit scores are determined based on the following factors.

1. Payment history

Payment history says about your past financial obligations and how quickly you met them. Problems such as bankruptcy will reduce your credit score. If you paid your credits promptly you will get a higher credit score.

2. Current debt

How much you owe contributes to your credit score. This factor considers the present financial position. If you are in debt with a large number of sources then obviously it is going to pull down your credit score significantly.

3. Duration of Credit History

If you are having a good credit history over a long period of time, then you will land with a good credit score. It is similar to someone with longer work experience is preferred over someone with lesser work experience. Having a good credit history over longer time period is important.

4. Number of Credit

If a person has more number of credit cards, then it gives a negative impression about the person’s finance and so it will lower the person’s credit score. Someone with lesser credit sources will be given a higher credit score.

Kerry Jonas asked:


UK Debt is a huge problem and is set to worsen. If financial problems are an issue, write off debt as a result of unenforceable credit card agreements.

If a credit card was taken out prior to April 2007 there’s a significant chance that it is an unlawful credit card agreement and it is possible to write off the debt. The Consumer Credit Act 1974 has a fundamental requirement that any agreement must comply with certain prescribed terms.

Examples of Unenforceable Credit Card Agreements



The interest has been incorrectly calculated.

The credit charges are not deemed to be fair.

No rate of APR is displayed.

There is no mention of any ‘cooling off’ period.



Settled Debts Cannot be Successfully Challenged

It is unlikely that settled debts can be recovered. A number of test cases have gone through the courts and none have been successful to date. Credit card debts that have been included in Debt Management Plans can be challenged.

What Happens if the Credit Card Agreement is Lost?

The lender has to send any information it holds on the debtor within a period of 40 days or it has committed a criminal offence. If the lender cannot provide a copy of the actual, signed credit agreement they aren’t in a position to enforce the debt as it is an illegal credit card agreement.

Will This Have a Negative Impact on Credit Ratings?

Provided payments are kept up during the legal challenge, no credit rating will be affected. Those who have adverse credit could actually improve their credit rating. This is because the debt was deemed to have never technically existed so no adverse credit entries can be registered for a debt that doesn’t exist. These entries can be removed when a case is successful.

How Long Will it be Before the Outcome?

The duration of any case does vary depending upon the institution and complexity of the case. Most cases are usually settled within 3 to 9 months, sometimes a lot sooner.

What Happens if the Unlawful Credit Card Agreement Case is Successful?

If it is decided that there is an illegal credit agreement, it is possible that the entire debt will be written off. This will mean that the balance is completely wiped and the solicitor will be able to advise how to get any adverse credit entries removed in relation to the debt.

What About Credit Card Debt that Cannot be Written Off?

For more recent credit card debts that cannot be written off, it is worthwhile considering a Debt Management Plan or even an Individual Voluntary Arrangement (IVA). It is imperative the serious debt problems are dealt with as efficiently as possible.

Whilst technically possible to handle the case personally, most financial institutions are unlikely to take any case seriously without the threat of legal action. A Solicitor will assess any agreement and put together a breakdown of any transgressions. Should they feel that it is an unenforceable credit card agreements, everything will be handled by them.

The Author invites readers to visit Write Off Debt Under The Consumer Credit Act 1974

Possibly related posts:



Clear your Credit Cards legally due to flawed credit agreements

BBC Panorama Write Off Debt | Loophole clears couples debt’s | Write Off Unfair Loans