Credit Rating: How it works and How to improve it discussion area

sophierach

Hi,
I got myself into a large amount of debt whilst at university and have just been struggling with it ever since - going over my overdraft, going over my credit card, etc etc.
I have £3250 of debt in two accounts - one credit card and one overdraft. I do pay £150 into the credit card account every month as a standing order, although it tends to get used up again.
I've got two more months of paying my dad off, and then I've got a plan set where I pay £200 every month for the next 16 months after which point I should be completely debt free.
When I've paid all this debt off, in 16 months time, what will my credit rating look like? Have I ever got any chance of getting a mortgage or anything?
I'm really beginning to worry about this because I want to progress onwards with my life and I want, once it's paid off, this to stop hanging on to me.
I have no savings and therefore can't just get rid of it other than paying it off a bit at a time.

CannyJock

sophierach wrote: »

Hi,
I got myself into a large amount of debt whilst at university and have just been struggling with it ever since - going over my overdraft, going over my credit card, etc etc.
I have £3250 of debt in two accounts - one credit card and one overdraft. I do pay £150 into the credit card account every month as a standing order, although it tends to get used up again.
I've got two more months of paying my dad off, and then I've got a plan set where I pay £200 every month for the next 16 months after which point I should be completely debt free.
When I've paid all this debt off, in 16 months time, what will my credit rating look like? Have I ever got any chance of getting a mortgage or anything?
I'm really beginning to worry about this because I want to progress onwards with my life and I want, once it's paid off, this to stop hanging on to me.
I have no savings and therefore can't just get rid of it other than paying it off a bit at a time.

If you don't miss any payments for the next 16 months and don't exceed your credit limit then it'll look a lot better. Don't go overboard in applying for things either.

The main thing you need now for a mortgage is a chunky deposit, by the time you've got that together any damage done previously should be ancient history.

Meanwhile, it's worth paying £2 to Experian and Equifax to get a copy of your credit reports from them to see how they look at the moment - don't pay for their credit score, it's meaningless.

sophierach

Oh thank you so much for the reply!
I've been utterly petrified since I've "grown up" and realised I am going to want my own place and my own life at some point over the next few years that this would stick with me for life.
I genuinely have no need for anything else at the moment, I have a comfortable enough salary to live off. I should be able to just pay everything off over the next 16 months and be sorted then, and yea, hopefully be able to slowly build up some savings alongside my partner for us to get somewhere ourselves one day.

SHolding

Have just been turned down for a loan. Realised that this is most likely to do with fact that we have applied for 5 loans in 3 months and this has had detrimental impact on credit rating. Two of the 5 were for credit cards; three were for unsecured loans. Turned down for all, even though have more than the means to afford the repayments.

Spoke to our bank about a loan; they approved us in principle but suggested we wait 3-6 months before applying formally.

How long should we wait before applying for another loan?

Many thanks

CannyJock

SHolding wrote: »

Have just been turned down for a loan. Realised that this is most likely to do with fact that we have applied for 5 loans in 3 months and this has had detrimental impact on credit rating. Two of the 5 were for credit cards; three were for unsecured loans. Turned down for all, even though have more than the means to afford the repayments.

Spoke to our bank about a loan; they approved us in principle but suggested we wait 3-6 months before applying formally.

How long should we wait before applying for another loan?

Many thanks

6 months...

babymoo

Hi all

I am after a bit of advice, I want to know the best way to build my credit rating. I got into debt in the last few years, all of which has been paid off in full and final settlements.
They have been settled since february. The debts I had were a bank account which was overdrawn, a loan from the same bank. I had outstanding balances on a mobile phone, and with utility companies.

I realise that I was stupid by ignoring all the debts but they are now all settled and for 2 years now I have had a basic bank account which in my banks words has been used perfectly. I have been trying to build up my credit rating and I have no idea how to do it. I am on the electoral roll, I have car insurance going out on a monthly direct debit which has gone out on time every month with no problems. I have vouchers with provident which I save for xmas which have been paid every week without fail.

Today I spoke with my bank who tried to get me a better bank account in the hope that it would help to build up the credit rating but I didn't pass their checks.

I am quite happy not having credit, I don't need it as I save for everything I want. How do I build my credit rating so that say in 6 years time I can apply for a mortgage with my partner?

Any help would be greatfully received.

Thanks

djbum_syd

CannyJock wrote: »

You need to record a Notice of Disassociation - the credit reference agencies can give you the details.

Can take a couple of months for accounts to be updated, though I've had LTSB accounts not updated for nearly 4 months. Was the account actually defaulted or did you just have a missed payment?

Hi,
We never had a joint account or applied for anything together, except we were both named on our Tenancy agreement - but we always paid rent on time.
This is why I was a little confused as to why I am linked with him.
But will speak to the credit agency to sort out the Notice of Disassociation that you mentioned.
Thank you for your help.

thussein

hi guys. after reading for a couple of weeks ive finally dicided to post a question.
ive recently decided to check my credit report and have notcied that my barclaycard has been over 70 pounds, my limit is 1000 so for the past two years its been 1070. i have now pad 600 pounds on it and im waiting to see it improve. my question is if i apply for credit would this go against my application (the fact that it was over the limit for 2 years but no late payment, all DD) thanks

Fantasy00

Erm... i've posted this on a few other forums on this site.... but haven't received a response that makes any 'sense'. (i don't think i make sense too?)

my question is 'how does a credit check actually work'? i mean, what information on my credit report can lenders see? how can they operate an 'instant decision' ? I heard that the credit reference agencies make decisions for some lenders such as ARGOS? is this true?

Thanks..

bsquiggle

I am currently overseas for an extended period, and do not have an address in UK. My last address in the UK is from nearly 3 years ago and of no help to me. However, I have some lingering debt which I'm still sorting out and am slightly concerned about the potential for ID theft given my absence (by a stranger or my ex, who knows)... the banks and companies concerned are aware of my absence and that's all fine (though egg refuses to lodge a change of address, they say they have noted my new one on the file... three years later they keep asking me to activate a card they know I haven't received!!).

Anyway, my question is how I go about checking my credit report since neither Equifax's nor Experian's form seem to cope with O/S addresses, and I used the online deal previously (call me paranoid...). And what should I list as my current address, given the info above (egg is significant creditor in my case)