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

DizzleUK

glennc1981 wrote: »

Hi,

I'm in the process of paying off several debts I foolishly abandoned when I moved house in 2005 (two credit cards, one loan). All being well I will be debt free by October 2011.

I currently have a basic account and I am in full time employment (paying over £1000 into my account) but at the moment I'm ok to be credit-less. I was just wondering when you folks think I should try for credit again. I'd love to get a contract mobile but I don't want to cause any problems for myself. I will say I've grown up a hell of a lot since my silly days but I hope it won't hang over my head for too long.

Thanks for your help.

Have you got hold of a recent copy of your credit reports? If not then I recommend you get a statutory £2 copy of your report from Experian and Equifax (CallCredit too if you really want to) and see what's on there.

Defaults and CCJs will drop off your file 6 years after they were registered- dramatically improving your standing. If all the defaults are all from around 2005 then you may find you might get something like a mobile contract now and maybe even a credit building credit card from somewhere like Capital One.

Try these and run them perfectly then when you finally get rid of the nasties on your file (which sounds like it could be next year) you will have some great recent credit history which will help you if you wanted to move up to a full bank account or get a decent APR loan/credit card in the future.

DanFord29

I got into a lot of debt when i was 21/22 credit cards, store cards, loans etc, the situation came to a head when my re-payments were more than my monthly income. The only alternative avail to me at the time was to go through a debt management company called Baines & Ernst, i started using them in Nov 2004 and i continued to make monthly payments until Aug 2008 when i had saved enough money to settle the debts in full. Since then i have taken no credit out. I recently started looking for a house but i was declined a mortgage becuase of my credit history.

I registered with Experian and discovered 4 defaults from various creditors and also a ccj, this was the first time i even knew i had these things affecting my credit.

Since then i have managed to get the CCJ set aside by a judge and that has now been removed from my record, and the defaults all show as satified since 2008, however i still fail the credit application for a mortgage?

I have been advised that the defaults do not get taken into account? Im at a loss what to do next, i fell like i have been miss-represented by the debt managemnt company as they insisted they would handle all the creditors and act as a go-between, they insisted all mail from creditors be sent directly to them, and the defaults were all issued at the end/beginning of 2005/06 after i had been makingm regular monthly payments to Baines & Ernst?

Im now at a loss of what i can do, does the fact i ave taken no credit out since paying the debts have a negative effect on my credit? And if so what happens if i apply for a credit card and gte declined that will be another foot print on my credit file.

PLEASE HELP !!!!!!!

izools

DanFord29 wrote: »

I got into a lot of debt when i was 21/22 credit cards, store cards, loans etc, the situation came to a head when my re-payments were more than my monthly income. The only alternative avail to me at the time was to go through a debt management company called Baines & Ernst, i started using them in Nov 2004 and i continued to make monthly payments until Aug 2008 when i had saved enough money to settle the debts in full. Since then i have taken no credit out. I recently started looking for a house but i was declined a mortgage becuase of my credit history.

I registered with Experian and discovered 4 defaults from various creditors and also a ccj, this was the first time i even knew i had these things affecting my credit.

Since then i have managed to get the CCJ set aside by a judge and that has now been removed from my record, and the defaults all show as satified since 2008, however i still fail the credit application for a mortgage?

I have been advised that the defaults do not get taken into account? Im at a loss what to do next, i fell like i have been miss-represented by the debt managemnt company as they insisted they would handle all the creditors and act as a go-between, they insisted all mail from creditors be sent directly to them, and the defaults were all issued at the end/beginning of 2005/06 after i had been makingm regular monthly payments to Baines & Ernst?

Im now at a loss of what i can do, does the fact i ave taken no credit out since paying the debts have a negative effect on my credit? And if so what happens if i apply for a credit card and gte declined that will be another foot print on my credit file.

PLEASE HELP !!!!!!!

Whoever told you satisfied defaults don't affect a mortgage application needs their head examined - they most certainly do!

First of all, chances are you'll fail a mortgage credit check until the defaults dissapear entirely. They will drop off your credit file six years from the date of the original default notice. How old is your most recent default?

Secondly, when applying for a mortgage they don't just check whether you have adverse credit in the past - they also expect to see positive repayment history and evidence of your being able to successfully manage a credit account.

Do you have any credit accounts at the moment (credit card, loan, lease hire)? Bank accounts and mobile phone contracts that appear on your credit file are accounts but they aren't credit accounts regulated by the Consumer Credit Act and as such don't have a big impact on your credit score.

If you don't have any credit cards or loans, take out at least one sub-prime credit card; preferably two.

I would recommend Capital One Classic, Aquacard, Barclaycard Initial or Vanquis. Capital One Classic and Vanquis are the easiest to get.

Once you have held a couple of credit cards for a year or so, and your defaults have dropped off your credit file, you will be in a much stronger position to apply for a mortgage, but of course even then, affordability and stability will play a big part in your ability to be given one.

Good luck! It's a bit of a climb yet, but well worth it in the end

Smog

Hi,

Sorry if this has been asked before but this is a long thread

Ive just checked my report on Equifax and it has given me a Poor rating for credit at my address with a fair rating over all. It says that this is because I have no credit at this address when I have a current account with overdraft, credit card and a loan here. My bank and lender all use this address for correspondance and the loan and credit card were taken out at this address so I'm not sure what to do next.

Can anyone help with who I can contact to put this right please?

Thanks in advance

lisyloo

Are your current account and loan at the current or old address.

If they are at the old address you need to ask your bank to update the details at the credit reference agencies.

Smog

Hi lisyloo, thanks for the reply.

My credit card and loan were taken out at my current address, my bank account was taken out at an old address but I have updated my details so that the account is now at my current address.

None of the above are shown on the credit report from Equifax.

bubblegum_90

No previous credit only mobile phone contract always paid on time, I understand I would not have a good rating as have not proved credit worthiness but how I can I prove this if I can't get any credit? Also is it too risky to apply for credit elsewhere now as this could reduce rating, I need temporary credit now for the next 3 months until I start new job?

davesdaughter

Hi

I've been checking my credit report and I have one default registered. This is for a credit card account which has been in dispute for over a year. Are the bank allowed to register the default whilst the account is in dispute? Is there anything I can do about this?

thank you

surrey_jim

bubblegum_90 wrote: »

No previous credit only mobile phone contract always paid on time, I understand I would not have a good rating as have not proved credit worthiness but how I can I prove this if I can't get any credit? Also is it too risky to apply for credit elsewhere now as this could reduce rating, I need temporary credit now for the next 3 months until I start new job?

Try and apply for a credit card with your bank. It will probabaly be fairly high APR with a lowish limit however using this and building on it will improve your credit rating.

surrey_jim

davesdaughter wrote: »

Hi

I've been checking my credit report and I have one default registered. This is for a credit card account which has been in dispute for over a year. Are the bank allowed to register the default whilst the account is in dispute? Is there anything I can do about this?

thank you

Write to Experian / Equifax to advise them of the dispute. The credit bureau must contact the bank within five days of receiving your dispute and has 30 days to verify the disputed item. After completing their investigation, they credit bureau must notify you of the results and include an updated copy of your credit report.