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

Moggles_2

Damage8 wrote: »

I tried to open an account recently but they messed up and now say that the only way to get it sorted is to open another, which would require another credit check. Will two credit checks within a few days have an impact on my credit rating or would it not really make any difference?

Is this a current account or a credit card account?
May I ask which provider is involved?

frazzler01

Hi

I had some troubles recently and applied for loads of loans in a short space of time. None of these were accepted (i.e. i haven't actually borrowed money from any lender) however i'm scared this will have hurt my credit rating ! can someone explain how this works please?
I also have moved around a lot in the past couple of months. Does this hurt my credit rating also??

Thanks so much

Moggles_2

Damage8 wrote: »

I tried to open an account recently but they messed up and now say that the only way to get it sorted is to open another, which would require another credit check. Will two credit checks within a few days have an impact on my credit rating or would it not really make any difference?

Originally Posted by frazzler01
I had some troubles recently and applied for loads of loans in a short space of time. None of these were accepted (i.e. i haven't actually borrowed money from any lender) however i'm scared this will have hurt my credit rating. Can someone explain how this works please?

Well, it depends what else is on your credit files.

Think about the number of applications for credit you've made in the past 3 months. Include catalogues, store cards, mobile phones etc. not just credit cards, loans and bank accounts. Anything with credit facilities will leave footprints on your file. Then consider your plans over the next 3 months.

Credit checks appear on your credit file more or less in real time. In itself, the effect of a couple of credit checks in 3 months may be insignificant but, in the context of your credit history as a whole, could certainly have an impact on your credit rating.

Remember any firm that searches your file subsequently will see each credit check until it drops off your file 12 months later. Btw, an increasing number of online and telephone credit card applications (those which give instant decisions and credit limits) are now real time applications too.

Moggles_2

frazzler01 wrote: »

I have moved around a lot in the past couple of months. Does this hurt my credit rating?

Many honest individuals are obliged to move frequently, through no fault of their own. Unfortunately, fraudsters move around a lot too (or so we're told). It's one of the ways they attempt to avoid detection.

Basically, lenders like stability, so best practice when building a credit history is to apply for credit facilities, where possible, before you move/change jobs/change banks. Being with the same employer, bank and current address for a while, all help when applying for credit. The longer you stay put the better, as far as your credit history is concerned

topman5499

Hello, first time poster on here so help greatly appreciated from all you moneysavingexperts!

I have a couple of questions regarding wiping a default from my file via the FO and obtaining a mortgage in the future...

In essence my financial profile is the following. I have a reasonable credit history. All unused credit accounts have been closed/settled. I am on the electoral roll at my address. I make all mimimum payments on time. I have 1 default (tiny amount, defaulted because my family had moved and I had no info re missing any payments, so defaulted without any knowledge of having done so!!) I defaulted in 2007, so has 4 years left to run...

I earn £24000 p.a., and have £500 of savings to date in topline direct saver and ISA accounts (I am now saving £150 combined pcm in both) I have a £1000 credit card that I am looking to payoff at the close of the calandar year (having paid off £2500 in other student debts this year)

I have a £2000 interest free graduate overdraft with RBS, so thus this debt is not as pressing to deal with currently.

So my first question, do I have a case for getting this wiped from my file?

My second is, what should my approach be for obtaining a mortgage for the future?

Thankyou so much for your help/advice.

Moggles_2

topman5499 wrote: »

Regarding wiping a default from my file via the FO and obtaining a mortgage in the future ... Do I have a case for getting this wiped from my file?

Welcome to MSE!

We do not have the right to have information removed if it is basically correct, but you can ask the credit reference agencies to put a notice of correction on file explaining why you think information is misleading. This notice will then be seen by banks, mobile phone companies etc, when you apply for credit.

Most credit decisions are computerised, so if there is a notice of correction on file, your credit applications will take longer to process because they have to be referred for a manual decision i.e. a person will decide whether or not you can get credit.

Building a credit history takes time, but you've made a good start, from the sounds of things.

For tips, have a look at the *Credit Rating: how it works and how to improve it guide* (if you haven't already), especially Martin's *Manage and Improve your credit score* article

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

izools

topman5499, I would reccomend writing to the creditor concerned advising that you never recieved a written default notice prior to the account falling into default.

I assume the default has been settled? If so, advise the creditor that you would like the default notice removed from your credit file on the basis that you were not given written warning to rectify the problem prior to the account falling into default.

If the default is outstanding, write to the creditor enclosing a cheque stipulating that the cheque must only be cleared on the basis that the default marker is removed altogether from your credit file, for the same reason, that you were not served with a written default notice prior to the account falling into default.

Don't worry if they did send a default notice, it's a bit of a bluff and well worth a punt! They can only say yes or no, and you've not lost out if they say no

kindofaverage

izools wrote: »

topman5499, I would reccomend writing to the creditor concerned advising that you never recieved a written default notice prior to the account falling into default.

I assume the default has been settled? If so, advise the creditor that you would like the default notice removed from your credit file on the basis that you were not given written warning to rectify the problem prior to the account falling into default.

If the default is outstanding, write to the creditor enclosing a cheque stipulating that the cheque must only be cleared on the basis that the default marker is removed altogether from your credit file, for the same reason, that you were not served with a written default notice prior to the account falling into default.

Don't worry if they did send a default notice, it's a bit of a bluff and well worth a punt! They can only say yes or no, and you've not lost out if they say no

hi - they could always bank your cheque, not reply and not remove the default?

izools

Nop because you'd state in your letter that the cheque is to be returned if they don't agree to the terms laid out in the letter.

The letter would be sent recorded delivery so you'd have their electronic signiature.

The other option, if you feel the creditor would not honour the contract, would be to send a letter suggesting settlement in return for the default being removed, and send the cheque once you've had it in writing from them that it is acceptable.

If of course they bank the cheque and don't remove the default the ICO would force the CRA to do it... but that's hasstle.

naijapower

izools wrote: »

Nop because you'd state in your letter that the cheque is to be returned if they don't agree to the terms laid out in the letter.

The letter would be sent recorded delivery so you'd have their electronic signiature.

The other option, if you feel the creditor would not honour the contract, would be to send a letter suggesting settlement in return for the default being removed, and send the cheque once you've had it in writing from them that it is acceptable.

If of course they bank the cheque and don't remove the default the ICO would force the CRA to do it... but that's hasstle.

Agree with this option...though a hassle but best way forward