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The Government has replaced many older benefits with Universal Credit. Universal Credit is intended to help people who are struggling financially, and claims have rocketed during the coronavirus pandemic.
Does Universal Credit affect your credit rating?
A credit score or credit rating is a tool used by lenders to help determine whether you qualify for a particular service.
Your credit rating is used to determine whether applications for credit cards, loans or mortgages are approved.
A credit rating is a numerical figure, and usually the higher your credit score the better it is viewed by lenders.
The Experian website states: “If you are claiming Universal Credit it won’t affect your credit rating.
“Your credit score, or rating, looks at your borrowing history, what debt you have and whether you have repaid your debts reliably.
“Universal Credit forms part of your income so wouldn’t appear in your credit history or affect your credit rating.”
However Experian add claiming Universal Credit “may affect any applications you make for credit such as mortgages, loans or a new credit card”.
How long is the wait for Universal Credit?
It usually takes around five weeks to get your first Universal Credit payment, and the wait between applying and receiving the first payment has been criticised.
The five week wait consists of a one month assessment period, plus seven days for the payment to process and reach the claimant’s account.
The benefit is usually paid once a month, but in Scotland you can be paid once or twice a month.
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How can I apply for an advance on Universal Credit?
If the need for money is urgent while waiting for your first Universal Credit payment, you can apply for an advance.
You can apply for an advance when you make your application for Universal Credit.
The maximum amount you can get as an advance is the total of your first Universal Credit payment.
You will also be expected to pay back some of your advance when you receive your first Universal Credit payment.
The advance doesn’t need to be paid back in one sum, but it must be paid back within 12 months.
If you have been claiming Universal Credit for more than six months, you may be able to apply for a Budgeting Advance.
Citizens Advice explain: “If you’ve been claiming Universal Credit for six months, you might be able to claim a Budgeting Advance for essential costs.”
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