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

MaudeLebowski

creative2013 wrote: »

I have 3 credit cards that have defaulted nearly six years ago. I set up individual payment plans with each company to pay off the debt. Interest / fees etc were stopped. Two of the accounts, HSBC and MBNA/Virgin Money showed and continue show the accounts in Default and no mention of the payments being made, even tho payments have been made monthly over the last 6 years, the third, Barclaycard shows ' arrangement to pay' / the amount paid each month and ' account up to date. Should they all show ' arrangement to pay ' instead of 'Default'. each account has changed hands several times with payments being maintained as set up originally.

I had a similar situation - found that some creditors reported it as an AP whereas other just reported it as a Default. I guess an AP is still technically a Default as the payment terms weren't adhered to.
Don't worry about them though if they defaulted nearly 6 years ago....they drop off 6 years from the date of default :beer:

Benjaminbrooks

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mattdrummer

Hi folks,

First post on the MSE forums since 2011... long time no see.

I'm in the process of getting my head around fixing my credit history (long overdue - just found a post I made in 2009 about a failed credit card application), and as such am working my way through the various sticky threads.

One quick question - I'm up to point 13 on Martin's 'improve your score' article, where he talks about picking up a high interest card and paying it off by DD to build some positive history. I was about to jump on that when I realised I actually have a credit card I never use with HSBC, who I have my current account with. It's got a 2K limit, and the APR is pretty standard I think, around 17/18%. I'll check, but I'd pay it off in full each month anyway.

So should I start spending on this card and paying it off by DD? Or is it somehow better to get one of these other cards?

I can't think why it would be better to get a new card rather than stick with this one, and it's probably a bit of a dumb question, but hopefully someone can help me out.

Cheers!
Matt

DCFC79

mattdrummer wrote: »

Hi folks,

First post on the MSE forums since 2011... long time no see.

I'm in the process of getting my head around fixing my credit history (long overdue - just found a post I made in 2009 about a failed credit card application), and as such am working my way through the various sticky threads.

One quick question - I'm up to point 13 on Martin's 'improve your score' article, where he talks about picking up a high interest card and paying it off by DD to build some positive history. I was about to jump on that when I realised I actually have a credit card I never use with HSBC, who I have my current account with. It's got a 2K limit, and the APR is pretty standard I think, around 17/18%. I'll check, but I'd pay it off in full each month anyway.

So should I start spending on this card and paying it off by DD? Or is it somehow better to get one of these other cards?

I can't think why it would be better to get a new card rather than stick with this one, and it's probably a bit of a dumb question, but hopefully someone can help me out.

Cheers!
Matt

Have you checked your credit files ?

Id just use the HSBC card if its still active.

[Deleted User]

Any card is fine.

The APR won!!!8217;t matter as you will be paying it off in full each month

mattdrummer

Thanks both.

DCFC79 - I haven't checked my credit files yet - that's next on the list. Just working my way through everything step by step. Starting to spend on my credit card and pay off in full by DD seems like an easy and quick action to take.

My situation's a bit messy - was living abroad for six years until recently, and my credit wasn't great even before that (as mentioned, got rejected for a pretty basic credit card back in 09).

Tried to join the MSE credit club but Experian couldn't verify me. So definitely do need to dig into the files and see if I can figure out what's going on.

*Sigh*. Lots of work to do, but good to be able to get started at least.

Cheers

Exorbitant_Extant

I'm currently trying to build up my credit rating a bit, it only registers as 'Fair' on the Experian Credit Club check thing. I know that it is more an art than science as Martin says, so i was wondering if there might be a consensus on my best option.

I have two items on the checklist as orange, one is being a tenant rather than a homeowner, not much i can do about that at the minute. The other is credit utilization being too high or too low, it must be the latter as i only have one CC as debt, and spend about £50 a month on it, always paying off each month. I do have an old settled CCJ on my account, which doesn't appear to show as a CCJ i guess because it's settled ?

What I'm wondering is if a personal loan is likely to increase or decrease my score ? It would obviously add to my credit utilization. Or would i be better getting a cashback credit card and using that a lot, paying it off each month ? I know the real answer is a bit fluffy but might be interesting to hear some thoughts from others...

[Deleted User]

Exorbitant_Extant wrote: »

What I'm wondering is if a personal loan is likely to increase or decrease my score ?

Any change will decrease your score, which is why scores aren't used. They're just a gimmick to keep people entertained, much like horoscopes and fidget spinners.

You need to improve your credit history. Taking out a loan if you don't need won't help, as it tells lenders you are short on money, plus you will pay interest for the privilege of doing so.

The best way to build a good credit file is to use a credit card regularly, clearing in full each month when you get the statement. This will show lenders that you can be trusted with credit.

Willing2Learn

Hi Exorbitant Extant,

Exorbitant_Extant wrote: »

What I'm wondering is if a personal loan is likely to increase or decrease my score ? It would obviously add to my credit utilization. Or would i be better getting a cashback credit card and using that a lot, paying it off each month ? I know the real answer is a bit fluffy but might be interesting to hear some thoughts from others...

Just use your current card freely. Spend in shops on the normal stuff that you have budgeted for. Do all your food shopping, clothes, petrol everything on the card. Then pay the balance in full after the statement has been received.

Edit: And ignore your credit score as lenders don't use it.

sonuenjoys

Under DD scheme, payments or refunds made atleast 3 working days prior to the due date will reduce the full amount DD as well as a minimum payment DD. Fixed amount DD continues until you have a balance on the account atleast 3 WD prior to PDD.