Moving home and the implication’s on one’s credit score
“Moving on, is a simple thing, what it leaves behind is hard,” said Dave Mustaine, the legendary co-founder of a popular American band. Metaphorically or not, the very thought of a relocation in the physical world can be distressing, more for the complexities involved. One such hassle could be the impact on your credit report.
In today’s highly competitive environment, individuals often relocate for better employment prospects or other economic reasons. However, such movements can have major implications on their credit worthiness. Let us examine some of the consequences and remedial measures thereof.
#1 Seek a credit report, avert credit hassles
While few tend to remember their credit profile before undertaking the more tedious shift of base, it would mean a world of difference to their credit application. An updated credit information report helps you ascertain existing lenders as well as to inform them regarding your move. It is important to keep them notified, so that all further communication can be sent to your new address. After moving to the new place, one should compulsorily check if lenders have made the required change by seeking a revised credit report. This exercise is key for future credit since your potential lenders will check your credit management history and credentials besides your personal details from this document. If the report shows that you are prompt in your repayment, then it helps you to maintain or improve your Credit Score.
In any new city, your primary goal would be to find a home. These days, many landlords seek or check your credit report before renting out premises. For a lender, the requisites would be far more, including the `stability’ of a customer. A stable address for at least three years (as per documents like voters roll etc.) where you could have received all bills and communication is a definite plus.
#2 Keep your accounts, address updated
So before you move home, notify your lenders so that your credit account details can be kept up to date and get a copy of your credit report to remember them all because even those – lying idle or unused - matter. Unless your stay is temporary in nature, you must move your accounts to a reliable communication address which will help boost the confidence of your lenders.
This is also key from another point of view; Identity theft. If any important communication from a lender falls into the hands of a fraudster, it can be misused leading to theft or criminal activities. Thus, monitoring your bank and credit card statements, verifying the mailing address with the post office and financial institutions and keep an updated credit report are important to avoid data or identity theft. In fact, lenders prefer an address that is registered with the government (say Aadhar) or any of the government agencies hence if you have none in the new residence, furnishing the proof from the previous premise would be sufficient. To boost the confidence, you can supplement it with multiple proofs.
In fact, there are several instances where individuals become victims of identity theft, leading to accumulation of debt and poorer credit score. Such instances must be reported to the authorities and intimated to the credit information company. Every credit bureau provides the option of resolving disputes in credit reports, though any change can only be done in concurrence with the concerned bank.
#3 Plan your move
So sift before you shift; the number of different addresses on your report may not dent your credit score, but your payment history and credit usage will. And so do the higher inquiries from potential creditors. Thus, planning the move and budgeting for it would help a great deal. Meanwhile ensure that your regular bills are paid on time as lost or delayed bills can alter your credit score and the future ability to borrow
Contributed by Mr. Mohan Jayaraman, Managing Director, Experian Credit Bureau, India
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