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

Moneymatt

Good stuff, thanks for ur help!!!

Ninarich666

Unfortunatley I've gone down the spiral path and applied for 4 credit cards and been turned down for all.

Before I applied for them I checked my Credit score with experian which was 999.

I have no defaults, all my details are correct (except for how long I lived at my previous address was filled out incorrectly on the application forms)

I'm in about £3000 worth of debt (all to the limit), £2000 over two credit cards which I really need to move over to a 0% balance transfer as the interest is killing me, and an overdraft of £1000 which i'm always in and a mortgage.

I don't know what to do next, do I have to wait another 6 - 12 months to try again? I can't afford to pay back massive amounts on my debts to clear them.

Moggles_2

Ninarich666 wrote: »

Unfortunately, I've gone down the spiral path and applied for 4 credit cards and been turned down for all.

Were any of these cards backed by the same bank? If you apply to the same lender, it's likely you'll be scored the same way each time.

Before I applied for them, I checked my credit score with Experian which was 999.

Credit reports, when ordered directly from Experian (or Equifax) are invaluable, but credit scores are at best a very rough guide and not worth paying extra for, tbh. It's easy to be lulled into a false sense of security by these numbers. Then it comes as a shock, when your application is turned down. (Equally, some forum users are put off applying at all, because of low scores.)

I'm in about £3000 worth of debt (all to the limit), £2000 over two credit cards which I really need to move over to a 0% balance transfer as the interest is killing me and an overdraft of £1000 which i'm always in and a mortgage.

Obviously, we don't know your annual income (and neither does Experian.) Just be aware that in addition to the number of accounts in use (our national average, btw, is five credit cards), lenders look at the extent their credit limits have been utilised. Maxed out accounts make you look stretched, so if you're planning to apply for market-leading BT cards, it's wise to leave plenty of headroom

I don't know what to do next, do I have to wait another 6 - 12 months to try again? I can't afford to pay back massive amounts on my debts to clear them.

Is it possible to move a balance to a new card in your partner's name, if there is one? This would buy you some time to pay down the other credit card.

janian

Hello
Does anyone know the answer to this? I have been recently turned down
for a credit card and the letter I received stated 'due to levels of debt'. I ordered a copy of my file and I have a lot of past loans and cards on the report which have been fully paid off in the last few years with no defaults. I have written to all the companies concerned but they are saying that although my cards/loans are already closed they do not have to remove the borrowing facility from my credit file if under 6 years old. So my report shows I have access to loads of credit even though its never used. I cant think of any other reason for being declined. Only Amex has responded saying they have removed their facility as a gesture of goodwill. Any help appreciated

Moggles_2

janian wrote: »

I have been recently turned down for a credit card and the letter I received stated 'due to levels of debt'. I ordered a copy of my file and I have a lot of past loans and cards on the report which have been fully paid off in the last few years with no defaults. I have written to all the companies concerned, but they are saying that although my cards/loans are already closed they do not have to remove the borrowing facility from my credit file if under 6 years old.

Are these closed accounts marked "settled" on your report?
(A settled account is one which you have made all the necessary payments to and which has been closed.)

Closing an account leaves a record on your credit file which persists for 6 years and, provided that the payment record is good, contributes positively to your credit history.

janian

Thanks Moggles
None of them are marked settled but they all have been some time ago. How can I get this amended? As you say that these previous loans/cards should work for me instead of against me I am totally puzzled why I have been turned down.

izools

janian wrote: »

Thanks Moggles
None of them are marked settled but they all have been some time ago. How can I get this amended? As you say that these previous loans/cards should work for me instead of against me I am totally puzzled why I have been turned down.

Are you sure they are not marked as settled?

If you "Settle" a credit card / store card / catalogue account by paying off the balance, the account remains open, even if you cancel the card and put it in the bin.

You need to specifically request the creditor close and settle the account, and within a month or two, the accounts will appear as settled on your credit report.

You will find that leaving old, unused accounts open, shows new creditors that you have "access" to a lot of credit. If you have three credit cards and two store accounts each with a £1,500 limit, that you haven't used for years, when you apply for new credit they will look at your report and see you have "access" to £7,500 worth of credit.

They then calculate whether you could afford to borrow any more, based on your income, if you maxed out these accounts. I would imagine the answer is no.

The best way to maximise your chances of obtaining credit are:

>Close any credit accounts that you don't need - don't just stop using them

>Ensure to leave a good third of your credit limit available on accounts you do need

>Don't miss payments, and pay more than the minimum

>Don't apply for credit more than twice in any six month period

>Make sure you are registered on the electoral role

>Wait until your newest account is atleast a year old before applying for more credit


Other things a creditor will ask for, which has an impact on credit scoring, are:

Residential Status
Time at address
Time with Employer
Relationship status


Remember, that credit scoring is never based on one piece of information alone.

Say for example you have two people, each have an Experian score of 900.

One has just bought a house, but has only lived there for three months, and bought this house for a new job, and has only had their job for three months.

The other is a private tennant, but has been living at their flat for eight years and has had their job for four years.

In most instances, the latter stands a better chance of being accepted and / or given a lower interest rate.

Other things can happen like this, for example:

Person A has an experian score of 700, person B has an experian score of 900

Person A is a homeowner, married with no children, has been living there for ten years and had their job for five years

Person B is a private tennant, divorced, just moved three months ago, and just got a new job.

Person A stands a better chance of being accepted / being offered a lower interest rate.

Complicated stuff, credit scoring! The information you "provide" on your application form can go a long way to improve your chances of being approved / given a good apr

"Massaging the Stats" is a phrase used a lot in the corporate world. I believe my "massaging the stats" on my Vanquis application form is why I was approved with a 39.9% APR just two months after bankruptcy discharge, when my other half was approved with a 59.9% APR with no history of bankruptcy, just the odd default.

janian

Moggles and Izools

I think I should have been approved as I tick all Izools boxes but Im
going to check that accounts are marked settled. I have already spent
loads on stamps posting letters to these companies as most of them
infuriatingly do not have email addresses for queries ( or if they do they are very well hidden). I'll have to write again asking they mark accounts as settled. The irony of it all though is that the credit card I have been turned down for I didnt even want. I was just on my lunch
and was asked to apply to get 20% off future purchases. I only went in the shop to buy lightbulbs! Even so I want to get this sorted in case I really do need to borrow in future.

Anyway thank you Moggles and Izools you are brill :T

izools

janian wrote: »

Moggles and Izools

I think I should have been approved as I tick all Izools boxes but Im
going to check that accounts are marked settled. I have already spent
loads on stamps posting letters to these companies as most of them
infuriatingly do not have email addresses for queries ( or if they do they are very well hidden). I'll have to write again asking they mark accounts as settled. The irony of it all though is that the credit card I have been turned down for I didnt even want. I was just on my lunch
and was asked to apply to get 20% off future purchases. I only went in the shop to buy lightbulbs! Even so I want to get this sorted in case I really do need to borrow in future.

Anyway thank you Moggles and Izools you are brill :T

Happy to help, good luck!

Also, if you are interested to see how an actual credit card company views your eligibility and credit scoring, try the Barclaycard "Am I Eligible" checker here:

https://letmechoose.barclaycard.co.uk/

It doesn't to a full credit search, so the search isn't seen by other creditors and doesn't affect your score. They use CallCredit for the eligibility check.

It's interesting to use this tool I've found, as my Father, who has great financial accumen and always works overtime to make sure everything is paid up and then some, isn't eligible for any Barclaycards.

My Brother, who has an incredibly lacsadasical approach to financial management, is according to the checker 70% likely to get a GoldFish card at 9.9% APR or 90% likely to get a Barclyacard Initial at 27.9% APR.

My mother, who again ticks all but one of the boxes, isn't eligible for a barclaycard - but that's another story. She has an old default (due to drop off in two weeks ) with over £12,000 outstanding, and Experian say she has a score of 900, taking this default into consideration!! Wha? I wouldn't trust the Experian score atall. Equifax seems more realistic, gives her a score of under 300 because of the default. Should be much higher at t'end of the month when the six years is up

brid13th

Hi, sorry if this has already been answered but I can't find it, perhaps someone can link me if it has.

Recently got my credit report from experian, it all looks pretty good except for the "Linked addresses" section, where there are 53 entries, all repeats of the same four addresses, some of the entries are exact duplicates of each other (same company, same date etc). Will this affect my chances of getting credit? If it will then is there anything I can do about it?

Many thanks.