Credit card myths busted

When it comes to credit cards, there are a lot of nasty myths and misconceptions passed around. These can often scare off first-time applicants for standard and balance transfer credit cards, but most are untrue and are not worth paying attention to.

To clear things up, let’s bust some credit card myths.

Myth #1: There is a credit blacklist

Some people believe that if you are refused for credit, you have debt or you have County Court Judgements (CCJs), then your name will be included on a credit blacklist and that no lender will go anywhere near you.

This myth is completely unfounded – there is no such thing as a universal credit blacklist. It is true that your credit history plays a part in whether you’ll be approved when you apply for a credit card, but not all lenders are looking for the same things. Besides, anything that has gone wrong in your credit history can be remedied and you can improve your credit rating with a few simple measures.

Myth #2: All lenders and credit agencies use the same credit scoring system

Similar to the myth about credit blacklisting, some people believe that all lenders and credit reference agencies (the companies that lenders use to carry out credit checks) use exactly the same credit scoring system. If this were true, you would not be able to get an application approved anywhere if you were turned away by one lender.

Luckily, this myth isn’t true. Credit reference agencies will use many of the same methods and tools to get information about you and your credit history, but in truth, each lender will have their own specific wish list for their ‘perfect customer’. This often relates to how much profit they can make from you rather than just the risk you represent.

So, if you are rejected by one lender, this doesn’t automatically mean that all others will turn you down.

Myth #3: Checking your credit record can damage your credit score

It is thought by some that by checking your credit record, through a credit reference agency (usually for a small fee) can damage your credit rating. No one really knows where this myth came from, as it is completely untrue. Checking your credit record has no effect on your score and it can actually be very useful as it allows you to identify areas you need to improve on to boost your rating, as well as giving you the chance to correct mistakes in the information held about you.

Knowing that you have a fully accurate credit record, and with the reassurance that your credit score is good, you can get on with finding the lowest interest rates and getting the best credit card balance transfer deals.

Is Your Business Insured Against Meteorite Damage?

Have you looked at your insurance policy recently and, if you have, is your business insured against meteorite damage? This might seem like an odd question to ask, but a surprisingly large number of businesses have an insurance policy tucked away in a drawer somewhere, but it is not until something untoward happens that they pull it out to see whether or not they can make a claim.

So what should a business be covered for?

As far as UK law is concerned, a business is not required to carry insurance, unless it has an employed workforce. In this case, the business must carry employer's liability insurance, for a minimum of £5 million. This cover provides protection for the regular workforce; as well as temporary staff, including casual and seasonal workers, against injury resulting from negligence on the part of the owners of the business.

If the company owns and uses motor vehicles in the normal course of its operation, then it is also necessary to carry third party motor insurance cover. Most businesses using vehicles will, however, choose to carry additional motor vehicle fire and theft cover, or indeed arrange comprehensive motor vehicle cover.

Just as we all accept that there are certain risks to owning a home, and choose to carry home insurance cover, so too most businesses accept the need to protect their assets. The difference, in the case of a business, is that there are more than just the business's premises to protect. Buildings, together with their contents, naturally need to be protected, just as a home does, against such things as fire, flooding, burglary, or even from being struck by a meteorite.

One additional requirement for a business when looking at property insurance is the need to also cover any losses incurred as a result of an interruption to normal business, following damage to the premises. Many businesses overlook this particular risk, and research suggests that more than three quarters of all businesses that suffer a major incident, without cover for the interruption to their business, fail within one to two years.

Again, because of the particular requirements of many businesses, property insurance can be extended to cover a wide variety of different things, with extensions including engineering insurance, goods in transit insurance, terrorism insurance, glass insurance and frozen food insurance.

There are several other risks that a business may, or may not, choose to insure against, and two in particular are worthy of note here.

The first is to provide protection for the business's employees. This will normally mean providing the workforce with private medical insurance cover. It is also common for employers to arrange life insurance cover, so that an employee's family is provided for, should he die while working in the business.

In the light of the current high cost of private medical insurance, many businesses today cannot afford to meet the full cost of providing cover, and so offer a scheme that allows their employees to purchase cover themselves at a subsidized rate. The second area for which businesses will often voluntarily provide insurance cover, is that of financial risk. This covers the business for such things as the theft of money, the business's inability to meet its financial obligations when a customer fails to pay his bill, and monetary losses resulting from dishonesty on the part of an employee.

A business may also decide to include key person insurance on their policy, if the business is at risk of incurring substantial loss should key individuals within the business die, or become disabled.

Finally, a business might decide to cover the risk of losing income should one or more of the business's licenses be withdrawn, or simply not renewed, for a reason that is outside of the business's control.

The cost of business insurance can be high, and some businesses see this as one area in which they can save some money. Unfortunately, even a small uninsured loss can be enough to bring a seemingly thriving business to its knees.