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

Stuckon100forever

Lexy1107 wrote: »

Please help; I recently checked my credit report only to find an error from a large mobile phone company that had become 'defaulted debt'. Long story short, the company finally realised this was an error and put my credit report right. However, I found out it's actually been like this for 4 years and as a consequence has caused me financial losses. I am pretty unhappy about this and am trying to find out my rights for compensation. Should I just write a letter of complaint or is there something stronger and more legally apt that I can write?

Thanks,

L

How long did you notice it was like this? Have you just found out or have you been complaining for a long time?

I'm sure you may be entitled to something though but you would need specialist finance advice. If you can prove that you have been unfairly treated by new lenders (for example refused credit, so had to apply to sub-prime or accepted but with a higher APR) then maybe you will have a case.

The problem is proofing this because all new lenders have different criteria so unless you can prove that you got a higher APR or refused credit because of the default then you may not get too far.

Good Luck :money:

Zack1

BaconandEggs wrote: »

How does an interest free overdraft affect your credit score?

Is it beneficial/detrimental to have one/use it?

I've used one in the past, but have never gone over the agreed limit.

It doesn't matter if it's interest free or not, that doesn't show on your report, so for all they know you could be using an overdraft at 15% or whatever the going rate for overdrafts is (which then could presumably mean you're desperate if you were prepared to pay charges)

I used to use my Student one but now don't. Apparently it's bad and shows you're living beyond your means (you could be stoozing etc, but they don't know or take that into account :mad:), otherwise you wouldn't need one. The effect is only temporary. With Exquifax they show what you are using at the current time (well as of ~1 month ago), so as soon as you clear it it'll be fine. You'll keep getting 0's even if you are in your overdraft (as long as you stay in the limit) as you're "using the account in the agreed conditions".

I think personally coming out of my overdraft has had a massive effect, as now I get most applications either accepted or referred, when I was in the overdraft they were all getting outright declined

RedBalloon

I work for a Limited company and recently Experian have given us a bad credit rating so I wasn't able to open a trade account. Any idea what I can do about this as a company rather than an individual?

izools

RedBalloon wrote: »

I work for a Limited company and recently Experian have given us a bad credit rating so I wasn't able to open a trade account. Any idea what I can do about this as a company rather than an individual?

Experian haven't "given" you a bad credit rating, rather the company has done something to result in them having a bad credit rating.

Other accounts that the company hold may be in arrears or over limit, they may have had court action brought against them, or a supplier / creditor may have defaulted them.

The situation is largely the same as with a personal credit report, the limited company needs to find out exactly what negative data is recorded against them through Experian or the like and address the problem by bringing their accounts back up to date, settling any defaults and CCJs, and waiting a while for their rating to improve whilst continuing to pay on time, every time.

Depending on the severity of the negative data this may take years.

BaconandEggs

Quick question:
Type of current account: effect on credit rating?
I currently have an "added value" account from Lloyds TSB, for which I pay a fixed amount each month. I use the AA cover and travel insurance. The overdraft facility it useful to have incase of emergency. However, I know I can save money by having a standard current account, and getting the services seperately myself. Would changing my current account type have any effect on my credit rating?

K1RST1E_2

Hi All,

This may seem really odd but I need to ask the question as just as I thought I understood how CRA's and their ratings work, they surprise me again.

Ever since I can remember, I have never been able to get a high street loan or credit card. When I was 18, I assumed it was because I had no previous credit history and when I moved out of home and struggled to pay bills, I relied on the bad credit, high interest finance much to my regret now! My credit rating has always been low because of this, never higher than 300 according to Experian. Last July, 2 defaults were placed on my credit file - one for £250 which is still outstanding, and the other for £180 which is now satisfied. In June this year, my credit rating was 314 (the highest it has ever been despite the defaults). At the end of June, another default was placed on my credit file for £111. I checked my credit rating today and it was 586 ... I have now moved from the Very Poor category to the Poor catergory. This may not sound like much but this is a big deal for me!!

My question is, why is my credit rating improving despite the defaults? I thought that a default placement would sort of freeze the credit rating in like the 100 region, let alone 3 of them! My overall debt on Experian is £2850 (excluding mortgage and defaulted amounts) and I am using 66% of my available credit.

Any theories would be greatly recieved!

Brian1966

Please totally IGNORE the random number generator that is Experian's credit score. Save yourself £5.95 a time, it really means nothing.
With recent defaults you will struggle big time to obtain credit but given the small amounts and if you can afford it try to negotiate a settlement in writing in return for removal of defaults. If registered by a DCA you stand a good chance and being small amounts it has to be worth it as opposed to waiting 6 years for them to fall off.
If you need any help, please ask

K1RST1E_2

Hi Brian,

Thanks for your response. I don't intend on applying for any credit but I just like to know what is going on with the rating but if it really is a waste of time, I will certainly stop spending the £5.95!

I have tried to get the defaults removed by negotiating but they are having none of it. They say they were reported accurately as payments weren't made and that's the end of it. Even after saying I will repay them in full, they won't budge. One of them I spoke to on Thursday and they were happy for me to pay it off to show as satisfied but would not remove the default. I have heard that a satisfied default is seen the same as an outstanding default so why would I part with my money when I am getting nothing in return? They can't chase me for payment etc. so I might aswell pocket the cash myself!

Brian1966

K1RST1E wrote: »

Hi Brian,

Thanks for your response. I don't intend on applying for any credit but I just like to know what is going on with the rating but if it really is a waste of time, I will certainly stop spending the £5.95!

I have tried to get the defaults removed by negotiating but they are having none of it. They say they were reported accurately as payments weren't made and that's the end of it. Even after saying I will repay them in full, they won't budge. One of them I spoke to on Thursday and they were happy for me to pay it off to show as satisfied but would not remove the default. I have heard that a satisfied default is seen the same as an outstanding default so why would I part with my money when I am getting nothing in return? They can't chase me for payment etc. so I might aswell pocket the cash myself!

You are right in that a default is a default regardless of whether it is satisfied or not. Some creditors may look upon a satisfied default as 'more favourable' but in general NO.
If dealing with a DCA then look for the various template on here, ranging from disputing the debt to s.10 cease and desist processing of data.
Be forceful and a DCA is far more likely to back down as reagrds getting money in return for removal of adverse.
Who are you dealing with at present?
Don't be bullied by them.
Just remember to communicate in writing only, don't phone them ever.
You are in good company on here

K1RST1E_2

Thanks Brian.

I have a satisfied default with OUSBA which was for £180. I set up a payment arrangement after receiving a default notice however it was done incorrectly and as a result, a default was placed on my credit file. I have gone through their internal complaints procedure and they have now referred me to the ICO but they tell me they can only deal with breaches of the Data Protection Act, which I don't think this fits into so I am at a dead end with this one.

I have an outstanding default of £250 with Redcats/ Laredoute. On Thursday I tried to negotiate a 'I'll pay the full amount if you remove the default' deal but with no luck. They said the default was placed fairly and accurately and as a result, cannot be removed but they were more than happy for me to set up a payment arrangement! :rotfl:

Finally, I have an outstanding default of £111 with Littlewoods. I have already sent a letter about this almost two months ago but they haven't responded, so I sent another about two weeks ago ... I'm still waiting!!

Other than the above, I always make double the minimum payments and settle any accounts I can in full. I feel a bit silly really as with the exception of the OUSBA, I'm in the mess as I told them to write the debt off due to an unenforceable CCA!! If I only knew then what the consequences would have been! Grrrrr!!!