Article by Sam Griffin - 9th December 2019

Santa’s Credit Report: The Untold Tragedy

Santa Claus is known world-wide as the merry gift giver, delivering joy wherever he goes. But have you ever stopped to wonder how the man behind the great, white beard manages his money? Just who is the real Santa?

Given the time of year, we’ve taken a light-hearted look at what Santa might find, should he have time to check his Credit Rating.

The truth is that because he’s unemployed, he’s not making a penny. He’s perhaps the most well-known volunteer and he’s definitely not in it for the money – he’s in it for the laughs. So how does he come by so many presents each year? We’ve assumed that, like a large percentage of the population, he uses his credit cards.

Christmas Credit Accounts

Santa is the cause of the peak season for retailers around the world. According to The Atlantic, there's an estimated 526 million children celebrating Christmas hopeful for a present on the big day (which we will value conservatively at costing £40 each), so Father Christmas will have to spend (or rather, borrow) a whopping £21 billion every year. Based on an average credit limit of £5,000 per card, this means the old man is carrying more than 4 million credit cards in his magical Christmas wallet.

To put this in perspective, Santa Claus is spending more each year than Canada does on its entire military budget. If Santa decided to switch focus from gift-giving to world domination, his £21 billion expenditure could fund a private army that would place the North Pole as the world’s 14th strongest military power, overtaking the likes of Canada (£16.5 billion) and Turkey (£14.5 billion). Considering the North Pole is firmly within NATO’s sphere of influence, it would rank as NATO’s sixth strongest member state.

Like the rest of us, it’s vital that Santa doesn’t exceed the credit limit on any of his credit cards. Spending over a card’s credit limit can result in the limit being reduced, having a higher APR introduced, and even a negative entry being placed on the Credit Report, which can hurt chances of future applications.

Credit Action, the money advice charity, reveals that it takes 26 years to repay the average person’s credit card debt using minimum repayments each month. The real price of Christmas is that with such a big debt mountain, it will take Santa 109 million years to clear his Christmas purchases if he makes only the minimum payment – and that’s just for one year of gifts. To put that in context, the supercontinent Pangea started to break apart 175 million years ago, when Santa had a grotto on a warm Eurasian beach, before the twisting tectonic plates stranded him in some snowy wasteland.

So what does all this mean for his Credit Report? In terms of creditworthiness, providing all his credit cards are paid on time, each credit card will boost his overall Credit Score. Credit Scores are largely based on the individual’s ability to repay what they borrow so usually the more accounts showing good repayment behaviour, the better. That said, his affordability may be called into question– considering he’s unemployed and in crushing debt – but the effect of all these credit cards on his overall Credit Score is going to be top notch if he pays on time.

Check out our guide on creditworthiness versus affordability for more on this.

Court Records

To deliver his 526 million presents in time for Christmas morning, Santa needs to clear 365,000 chimneys every minute. Travel at this sort of speed and you’re bound to bump into trouble. Speeding fines are through the grotto’s roof and there’s sure to be some illegal parking tickets there too. With this sort of volume, some will go unnoticed and before he knows it, Santa’s going to be slapped with a County Court Judgment.

Court Records aren’t a laughing matter and severely damage your Credit Score, so should be avoided more than month-old eggnog.

County Court Judgments (CCJs) are the most common Court Records and these can totally derail an application, not just for finance, but also for a potential job or rental property. Lenders, employers, and landlords all look for a financially stable and reliable applicant, so a CCJ being flagged up will spoil the chances of being accepted. CCJs demonstrate that a claimant had to resort to court action to reclaim owed money so lenders, employers, and landlords tend to steer clear with a wide enough berth to reverse a reindeer.

It’s worth noting that typically the status of a CCJ doesn’t matter when it comes to credit scoring. Whether the CCJ is years old and fully paid, it will still severely harm your creditworthiness. Only once a CCJ has been removed from your Credit Report will it stop hurting you. CCJs are removed once six years pass from date of issue, regardless of whether they’re paid or not.

Financial Associations and Aliases

As an international super star, Santa Claus has more aliases than most.

English speaking countries know him as Father Christmas, Santa, the classical Saint Nicholas, and his stage name Kris Kringle. Then across Europe there’s the German Weihnachtsmann (“Christmas Man”), the French Pere Noel, and Russian Ded Moroz (“Grandfather Frost”).

Aliases can play an important role in how information is recorded on a Credit Report for people who have used a different name in the past. The most common reason for a name change is after marriage when a surname is adopted, but any other name by which you’ve been known can feature on your Credit Report – this includes shortened versions of your name too.

An alias serves a simple purpose on a Credit Report: to ensure that any information under the old name is found and returned on your Credit Report. It means that, say after a marriage, you don’t have to start rebuilding your entire Credit History again, as your previous name will be linked as an alias, with all your information under that name coming too.

Financial Associations are other names that may feature on Credit Report. A Financial Association is any individual with whom you’ve had a financial link in the past. Often these are spouses, partners, or family members and are created when you make a joint application for credit (like a mortgage) or being jointly named on utility accounts, like for electricity. These can have a direct influence on your creditworthiness as, whenever you apply for credit, the lender can check any of your Associates’ Credit Reports alongside yours. This means any Associates with a good Credit Rating will help your chances, while those with poor Credit Ratings will drag your application down.

Our Guide on Financial Associations has more if you’re interested.

Santa is likely to find that he’s Financially Associated to Mrs Claus, but he won’t know whether that’s a good thing or not – it’s probably worthwhile her checking her own Credit Report too.

Electoral Roll

Santa is magical – not just because he inhales half a billion mince pies every Christmas Eve – but because he’s found a home he truly loves in his ideal location. He hasn’t moved recently so his Electoral Roll listing is solid.

An active Electoral Roll listing is the heart of a healthy Credit Report. Lenders will look at your listing to determine your stability, so the longer you’ve been registered at a single address, the better. The Electoral Roll is especially important because it’s historically been the hook upon which all other Credit Report information is hung. If a potential lender can find your Electoral Roll listing, it’s safe to say they’ll find your whole Credit Report, which means they can make a lending decision with confidence.

Between his well-maintained mountain of credit cards, his long-standing Electoral Roll listing, and his Financial Association with Mrs Claus – who is hopefully financially very respectable – Santa’s Credit Score would seem fairly strong. Unfortunately, the CCJs from unpaid parking and speeding fines have ruined what would otherwise be an excellent score so, as always, there’s room for improvement.

How do I check my Credit Report?

The only way to see what lenders see when you make an application is to check your Credit Report for yourself.

If you haven’t already, you can try us free for 30 days then just £14.99 per month. You can cancel easily online, by email, or freephone with no obligation. Our Multi Agency Credit Report is the only one to show your complete information from all four Credit Reference Agencies, so you can see everything you need in one easy-to-use format.

Here's ho-ho-hoping your Credit Rating is merry and bright.

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