Consumer rights: 'Help me repair my bruised credit rating'

How to reduce the likelihood of having a credit card application turned down...What are your rights when your employer decides to cut your hours?
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I've been turned down for credit cards by two companies. I've had cards before but I cut them up last year when I was made redundant. Now I'm back in work and am making enough to have rented my own flat, and even though I don't use cards a lot, I like the security of having one in an emergency. I don't think I've ever missed payments so I'm a bit fed up at being turned down. Can you suggest anything?

FC

North London

Card companies are being much fussier about whom they give cards to and nearly half of all applications are being turned down. Several factors might affect your chances. If you've just moved house, are you on the electoral register yet? If not, the card company won't have been able to check your address. Make sure you're registered by contacting the Electoral Registration Officer at your local authority before you apply again. In the meantime, get a copy of your credit file for £2 from one of the three reference agencies that keep records of how you keep up your payments – Call Credit at www.callcreditcheck. co.uk or 0870 060 1414; Experian at www.experian.co.uk or 0844 4818000 or Equifax at www.equifax.co.uk.

Once you've got your file, check that the details are correct. It will show if you were behind with your payments before your cut your cards up last year. Even a clean slate with no missed payments doesn't guarantee card companies will accept your application. Sometimes they turn down people who always clear their balances in full before the payment date. As customers, they are too good and so the company makes no money from them. Another reason for refusal, which doesn't apply to you as you have had cards before, is that people haven't had credit previously. Lenders can't tell whether they'll be high-risk customers or not, so they refuse to take the chance.

If something on your file is not correct, write to the reference agency asking for a correction. If there's a good reason for some missed payments, such as illness, ask them to attach a short note of explanation to your file. If all's in order, you can try again. The snag now is that as you've tried twice and been rejected, other card companies may decide you're a bad bet because you've been turned down. Have you applied to your original card companies? They may be happy to give you a new card if you've been a good customer in the past. If you can't foresee any immediate emergency and a holiday booking is a dream rather than a matter of urgency, it might be better to wait until you've been at your new address a bit longer and card companies start to relax their rules.

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I've just been told by my boss that I'll be working 20 hours a week from next month instead of 37. I have no choice – it's either 20 hours or nothing and everyone else has been told the same thing. But I won't be able to make ends meet and my girlfriend is just about to have our second baby so she can't work. The mortgage is the biggest worry, but if I pay that I won't be able to pay the rest of the bills. Is there any help I can get?

DF

Berkshire

In the past year, more than 600,000 people have found themselves in your shoes. According to the latest figures from the Office of National Statistics, the number of part-time workers is at its highest since 1992 and on average they earn £8,000 a year where the average full-time salary is about £26,000. It may not make you feel any better that you're not alone, but it's a big worry for a lot of people. In theory, your boss may be in breach of contact and, if so, you could take a case against him or her at an employment tribunal. In practice, you're probably right about not really having a choice. Your boss, like many others, will be trying to keep good staff in the hope that his or her business recovers quickly enough to keep you all on and get back to full-time working as quickly as possible. The alternative may be redundancies.

Ask for time off now to go and get money advice. Reasonable bosses will accept that you need to be prepared and allow you a few hours off to get to an advice agency. The local Citizens Advice Bureau is a good place to start. An adviser will go through any benefits you may be entitled to: possibilities include help with your mortgage interest and council tax, and tax credits. They can help you to look at the whole picture including your budget, make sure you have all the income you're entitled to and that your outgoings are as low as possible. They can also help you to work out what your payment priorities are: it's important to keep up the gas and electricity payments or you risk being cut off and you can be fined for non-payment of council tax, for example, while unsecured loans or credit card bills are lower down the priority list. You might want to take your contract of employment with you just in case the adviser thinks you could have a case against your employer, but, realistically, taking him or her to tribunal for cutting your hours is likely to ruin your working relationship now and for the future.

If there's any danger of getting behind with the mortgage, talk to your lender as soon as possible rather than putting it off. Lenders have been told by the Government to look at every possibility rather than simply repossessing people who are having problems keeping up their payments. Partly as a result of that, repossessions haven't been as high as expected. It may be possible to bring down your mortgage payments by changing the type of loan you have or by rescheduling it to pay it over a longer period of time. Get help before you have the shock of the reduced pay packet. It may be a long shot but if you could find one you could take a second part-time job, do some work on a self-employed basis if you have skills you can sell, or make a hobby pay. And if you have a spare room you are allowed to earn £4,250 a year tax free by letting out a furnished room in your home under the Rent a Room Scheme. You can find out more at www.direct.gov.uk

www.moneyagonyaunt.com

Do you need a financial makeover?

Write to Julian Knight at the Independent on Sunday, 2 Derry Street, London W8 5HF j.knight@independent.co.uk

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