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

noah271007

Hoogie wrote: »

Hi all,

I’m really hoping I may be able to get some advice from you as I appear to have issues with my credit rating and have no idea why, I currently have no credit cards and I want to get one ASAP as I will be looking to get a mortgage within the next two years and want to improve my credit rating.

I was recently pre-selected for a credit card by my long term bank. I have been with this bank for around 14 years and have always been in credit with them, however my application was then rejected despite the pre-selection.

I have since ordered my £2 report from Experian, but looking through it I can’t see anything which indicates I am a bad applicant, however some areas have worried me. They are:

a) Under the “Credit Account Information” section a new bank I have been with for 1 month is listed, however nothing else is listed. So the details of my long term accounts with my other bank are not shown, and neither is my mobile phone contract which I have had for several years and has always been paid fully on time.

b) I have 19 previous searches since05/05/08. Many of these are for insurance quote or laundering checks when I joined new banks etc. I have only ever applied for 2 credit cards so that shouldn’t be too much of a problem.

My questions are:

1) How can I ensure that the credit agencies take my long term bank accounts and mobile phone contract into consideration? These are my two main forms of credit and therefore I find their exclusion from the list very worrying.

2) Does this high number of previous searches pose a problem? Even though only 2 are related to card applications.

Thank you very much for any advice.

Hi

To answer your two questions:

1) I can see you used Experian to check your credit file. Have you also checked with Equifax or the third agency, Callcredit? It may well be they are reporting your account conduct only to Equifax. Contact your bank and mobile company to get them to report to Experian. Some lenders ONLY report accounts conduct when you are in arrears.

2) Unrecorded enquiries, quotations, identity verification checks, and credit report applications are shown for you on your copy of the credit report BUT are not seen by lenders. Every time you check or ordered your credit report, it make a footprint, but this is for your records ONLY.

Go back and check your report under previous searches section - any that are not listed as above are very likely a proper credit search and count for one!

noah271007

I suspect the reason your credit card application was declined is due to limited or no credit history on your Experian credit file. Which bank is it?

Innocent_Guy

Hoogie wrote: »

Hi all,

I’m really hoping I may be able to get some advice from you as I appear to have issues with my credit rating and have no idea why, I currently have no credit cards and I want to get one ASAP as I will be looking to get a mortgage within the next two years and want to improve my credit rating.

I was recently pre-selected for a credit card by my long term bank. I have been with this bank for around 14 years and have always been in credit with them, however my application was then rejected despite the pre-selection.

I have since ordered my £2 report from Experian, but looking through it I can’t see anything which indicates I am a bad applicant, however some areas have worried me. They are:

a) Under the “Credit Account Information” section a new bank I have been with for 1 month is listed, however nothing else is listed. So the details of my long term accounts with my other bank are not shown, and neither is my mobile phone contract which I have had for several years and has always been paid fully on time.

b) I have 19 previous searches since05/05/08. Many of these are for insurance quote or laundering checks when I joined new banks etc. I have only ever applied for 2 credit cards so that shouldn’t be too much of a problem.

My questions are:

1) How can I ensure that the credit agencies take my long term bank accounts and mobile phone contract into consideration? These are my two main forms of credit and therefore I find their exclusion from the list very worrying.

2) Does this high number of previous searches pose a problem? Even though only 2 are related to card applications.

Thank you very much for any advice.

Hi there,

I thin that your main problem is your limited credit history.

Can you please advise

1) Your Age
2) Length at current address
3) Are you on the electroal roll?

It seems to me that you may have to go Sub-Prime see PROLAINTS thread if need be!

Good luck in the meanwhile

Hoogie

Thanks for all the replies so far.

Regarding details that Innocent_Guy requested:

1) I’m 24.
2) I have been at my current address for 6 months but the application was made using my previous address, this is my parents address which has been my permanent address for many years.
3) Yes I am on the electoral roll.

In response to Noah271007: The bank in question is Barclays, and annoyingly when I went to my local branch today all they could say is that it made no sense as I had been pre-selected for credit cards, loans etc so as far as they are concerned I am a safe bet.

As for which agencies I have used so far I have only used Experian, Equifax are requesting further proof of identity and with CallCredit I couldn’t find a £2 credit report only an annual membership.

I have another question, when it comes to contacting my bank/mobile company to request that they list my details with the credit companies, who do I contact? Is there a specific department or do I just keep asking different people until they point me in the right direction?

Shorty_Bass_Player

ScRiMpNsAvE wrote: »

Hi Shorty

Welcome to MSE! As you've already applied and been accepted, unfortunately it sounds like the search has already taken place and been added to your file. It may be worth calling them to find out if they carried out a search as part of the application. If this is the case this may well have an impact on any further applications but if you've not carried out many applications in the last 3-6 months and you generally have a good rating I wouldn't worry too much.

To clarify, did you apply online for a specific card/rate and get offered an alternative by post? Did you apply for a card purely for the 0% balance transfer? If so are you still being offered 0% on balance transfers on this card? Also, how does your credit history look?

SnS

Hi there,

Thanks very much for the welcome and the helpful advice. I did apply online and was only informed about the APR I was being offered when the credit agreement arrived in the post. Still no mention of what the credit limit will be incidentally. I am applying purely for the 10 months 0% on new purchases and have still been offered this.

To be honest its not the end of the world because I have the capacity to pay off the intended purchases by the end of the 10 months intro period, it was more that it would be nice to have the typical rate should anything unexpected happen. Also I didn't understand why their offer was 5% higher than the typical rate. Although I haven't checked my credit score previously, I thought I'd be a good candidate because I've only ever had the one credit card which I've had for nearly 10 years. I've never owed more than £1000 on it and as I mentioned always pay off a large chunk each month although very rarely have a £0 balance.

I have called them and emailed them to find out why the rate was so high and also ask them to reconsider the rate. Their customer services have been quite uninformed and also slow to respond which is another reason why I decided to not proceed.

I am likely to be looking at mortgages in the next year and so if this is likely to negatively affect my rating seriously then maybe I will go ahead with it, pay it off and then close the card. However it would be nice to have the extra 2 months interest free with the other card I'm now looking at without damaging my rating.

My preferred option is to strike this search from my rating if it can be done on the basis that I didn't take the card but I can't really find out if this is possible.

Wow - this turned into quite a long post - sorry!

Innocent_Guy

Shorty_Bass_Player wrote: »

Hi there,

Thanks very much for the welcome and the helpful advice. I did apply online and was only informed about the APR I was being offered when the credit agreement arrived in the post. Still no mention of what the credit limit will be incidentally. I am applying purely for the 10 months 0% on new purchases and have still been offered this.

To be honest its not the end of the world because I have the capacity to pay off the intended purchases by the end of the 10 months intro period, it was more that it would be nice to have the typical rate should anything unexpected happen. Also I didn't understand why their offer was 5% higher than the typical rate. Although I haven't checked my credit score previously, I thought I'd be a good candidate because I've only ever had the one credit card which I've had for nearly 10 years. I've never owed more than £1000 on it and as I mentioned always pay off a large chunk each month although very rarely have a £0 balance.

I have called them and emailed them to find out why the rate was so high and also ask them to reconsider the rate. Their customer services have been quite uninformed and also slow to respond which is another reason why I decided to not proceed.

I am likely to be looking at mortgages in the next year and so if this is likely to negatively affect my rating seriously then maybe I will go ahead with it, pay it off and then close the card. However it would be nice to have the extra 2 months interest free with the other card I'm now looking at without damaging my rating.

My preferred option is to strike this search from my rating if it can be done on the basis that I didn't take the card but I can't really find out if this is possible.

Wow - this turned into quite a long post - sorry!

The lender is very unlikely to remove the search even if you didn't take their product however I wish you the best of luck!

ScRiMpNsAvE_2

Shorty_Bass_Player wrote: »

it was more that it would be nice to have the typical rate should anything unexpected happen.

Golden rule - if you get a credit card to balance transfer, don't spend on it! I learnt this the hard way... The secondary rate should not be a consideration and is therefore irrelevant. Scroll down to the 'Never, ever, ever spend on a balance transfer card' section here for more info on this...

Shorty_Bass_Player wrote: »

Also I didn't understand why their offer was 5% higher than the typical rate. Although I haven't checked my credit score previously, I thought I'd be a good candidate because I've only ever had the one credit card which I've had for nearly 10 years. I've never owed more than £1000 on it and as I mentioned always pay off a large chunk each month although very rarely have a £0 balance.

Things are eerily queer in the banking industry at the moment - there seems to be a sense of panic in the air (unsurprisingly). I got refused a debit (!) card applying for a Nationwide account recently. Also I applied for a HSBC credit card on 0% based on their recommendation and they declined me, even though I have been banking with them for 15 odd years with no problems on my account and a fair to good credit history. The next week I applied for a Tesco credit card and they accepted no probs. It will depend on different factors for each bank/lender.

Shorty_Bass_Player wrote: »

I have called them and emailed them to find out why the rate was so high and also ask them to reconsider the rate. Their customer services have been quite uninformed and also slow to respond which is another reason why I decided to not proceed..

I am likely to be looking at mortgages in the next year and so if this is likely to negatively affect my rating seriously then maybe I will go ahead with it, pay it off and then close the card. However it would be nice to have the extra 2 months interest free with the other card I'm now looking at without damaging my rating.

My advice would be to go for it anyway - the search has already taken place on your credit file (I don't believe you can remove a search, just amend one, and if you do it's I reckon it will do more harm than good when applying in future as there will be a big question mark on your credit file). If you're not going to use the card for new spending (which you're not! ) and you can pay it off within the 9 months then there's nothing to stop you. You won't have to worry about the searches in a year or so, they'll be long forgotten. As long as you pay on time you'll be fine.

See article here

If you need another card for spending apply for another with a low rate - don't lose confidence, you might be surprised with what another lender is willing to offer you. Personally I've just applied for a first direct account, got 100 quid for nowt, £500 OD and credit card even though I've had 3+ searches in the last 3 months and already have 4 credit cards! Won't be using the OD & CC but looks good on paper

Good luck!

SnS

Shorty_Bass_Player

ScRiMpNsAvE wrote: »

My advice would be to go for it anyway - the search has already taken place on your credit file (I don't believe you can remove a search, just amend one, and if you do it's I reckon it will do more harm than good when applying in future as there will be a big question mark on your credit file).

Thanks very much for this, I hadn't considered it from that point of view

If you're not going to use the card for new spending (which you're not! ) and you can pay it off within the 9 months then there's nothing to stop you. You won't have to worry about the searches in a year or so, they'll be long forgotten. As long as you pay on time you'll be fine.

See article here

Suspect maybe I will go for it after all now and pay it all off so they get no interest and teach them a lesson for offering such a high APR that way

If you need another card for spending apply for another with a low rate - don't lose confidence, you might be surprised with what another lender is willing to offer you. Personally I've just applied for a first direct account, got 100 quid for nowt, £500 OD and credit card even though I've had 3+ searches in the last 3 months and already have 4 credit cards! Won't be using the OD & CC but looks good on paper

Good luck!

SnS

Thanks once again for all the advice SnS, it really has helped - very much appreciated!

DrScotsman

Back in December, I applied online for a Natwest Student Credit card...twice. The online form failed the first time but it turns out it actually went through, so yesterday I ordered my Experian credit report for £2 (already did the free trial), to see if it's on there twice and to get it corrected.

So today, I'm thinking that I really ought to have a Visa credit card for Section 75 AND Visa chargeback protection. A lot of the build-your-score cards were Visas, so I thought after I've checked and changed my credit report I'd get one of those.

Today, trying to find Wii Fit! None of the voucher codes worked on Marshall Ward, so I thought I'd try Littlewoods. On registering, "Hmm, why does it need my PREVIOUS address as well? Oh well." *click*

"You now have £800 of credit" :eek: . Catalogues search you like everyone else, right? So I'll have to probably wait a bit before applying for any credit, right?

Moggles_2

DrScotsman wrote: »

Catalogues search you like everyone else, right? So I'll have to probably wait a bit before applying for any credit, right?

Credit checks drop off your file after 12 months, so the effect is short-lived. Even then, the checks are viewed as negative, only if you attract too many in a short space of time.

Two checks in almost 4 months isn't much to worry about, but it would be sensible to leave applications for credit alone for a bit.