How Your Credit Rating And Credit History Can Be Affected By Mail Order Shopping

Your credit rating could be seriously affected without your knowing if you use mail order catalogues or answer to magazine adverts. Companies selling items such as clothing, shoes and furniture are giving their customers credit check when they send back and order form, regardless of whether the buyer will pay in full in the end.

Every time you buy something through on e of these firms, your credit history is checked because technically you are making an application for credit - even if you later pay the bill in full. This leave a footprint on your credit record. The more credit you apply for, the more marks you will get on your record and your rating will fall.

This could lead to you being refused cheaper rates of interest for loans when you really need one, or even being turned down outright. The spokesperson from Equifax, one of the main credit bureaus says that if a customer is acquiring goods and paying later, it definitely fits the broad definition of credit and a credit check can be made by the vendor. However, he also confirmed that, a single credit search is not likely to make a significant difference on an individual's credit rating, but the cumulative effect of a number of searches may well have an adverse impact on a credit rating.

Although mail order companies do state on their order form that a credit check may be made, it can only be found in the fine print at the bottom of the order form. They however encourage you to buy and pay later. When your order is recieved, the company has the right to check they are going to send goods to a genuine person. Thus to protect themselves a credit check is made against the name and address and the credit information provided before goods are sent out.

So what can you do to prevent this? Ideally, it is best not to order from mail catalogues or magazine adverts such as "5 Great History Books For Only $5.99". Your credit rating is likely to suffer the impact in the long term.

It is always best to go directly to the shop to buy goods. Remember, that even if you go to the shop to make a "Buy Now Pay Later" purchase, your credit rating may still be affected. The trick is to buy now and pay now. You can also purchase it online without the goods having to be sent to you first then that is another good option. With the advances in technology, shopping online has become much safer and is growing in popularity. If you are buying the goods immediately which is the case with almost 99% of goods sold online, your credit card is only checked to ensure it's validity. No credit checks are made, thus protecting your credit rating. In fact, credit cards can now be protected online using Verisign for instance which prevents anyone from using your credit card to buy goods without a password.

Protecting your credit rating should always be paramount especially if you intend to borrow an important loan in the future. This can be a business or home loan. If your credit history is already badly affected due to small purchases made without knowing a credit check will be done, the eventual footprints it leaves on your credit rating will mean that all important loan being refused. The worse is if you settled your bills in full but still had a credit check run against your credit history.

To check you credit rating or credit score you can apply to any of the major credit bureaus including - Equifax, Experian and Transunion. Each credit consumer is entitled to at least one free credit report a year.