Credit Check Questions

MrsPitcher2b

Hello everyone

Just two quick(ish) questions.

Firstly, does checking your credit rating/obtaining a credit report affect your actual credit rating (as they do searches)

And Secondly, how quickly does clearing an account/paying off debts show and affect your rating?

Ok actually i think ive got a few mpore questions...

I seem to have a lot of credit accounts open if i do a credit search - like i have an additions account but i asked them to close it months ago. Instead they have just reduced the balance to 0 so the account still shows on the credit report. And i also have credit cards, but one got cloned so i cancelled it and was reissued another one, well the old card number has a seperate account on the credit list thing..

So does this affect my score? And if so how do i get them to remove it?

I am hoping to get a decent mortgage but not for atleats a year - and i am going to do NO searches for credit/get into debt etc in that year before, to hopefully bring my rating up. Do you think that will work?

GeorgeUK

Hello everyone

Hello

Firstly, does checking your credit rating/obtaining a credit report affect your actual credit rating (as they do searches)

When you check your credit report, this does not affect your credit rating. When a creditor does a credit application search, this leaves a hard footprint on your file. If they were to do a credit check to check your identity or give a quotation, this would leave a soft footprint. Soft footprints are only seen by the consumer - not the lenders. Any searches you make will not be seen by lenders either.

And Secondly, how quickly does clearing an account/paying off debts show and affect your rating?

It can vary between companies. Usually 2 months is an accepted timescale. If the lender only send information to the credit reference agencies once a month - we can count that as a full month. For the CRA's to update your details, they may only do that once a month - 2nd month. If it takes longer than that i would contact them to see what is going on.

I seem to have a lot of credit accounts open if i do a credit search - like i have an additions account but i asked them to close it months ago. Instead they have just reduced the balance to 0 so the account still shows on the credit report. And i also have credit cards, but one got cloned so i cancelled it and was reissued another one, well the old card number has a seperate account on the credit list thing..

Sometimes even when you ask for a card to be cancelled, they do not do so. Write asking for confirmation that the account has been closed and cancelled. Even an account that has been cancelled may not be closed - this is sometimes due to banks waiting to see if there are any transactions still to come through. That is why you should cancel any direct debits or standing orders before cancelling a card.

It should be noted however that even closed accounts will appear on your credit file. Closed accounts will remain listed for 6 years after the settlement date. Defaulted accounts will remain for 6 years after the default date.

So does this affect my score? And if so how do i get them to remove it?

It may depend on the status of the account. If banks see your report and that you have a creditcard with nil balance but a £6k limit, they may feel you have more credit available than they are comfortable with so may not offer you any more credit. I don't know what the codes the CRA's use to identify the account status.

I am hoping to get a decent mortgage but not for atleats a year - and i am going to do NO searches for credit/get into debt etc in that year before, to hopefully bring my rating up. Do you think that will work?

You can have about 3 credit searches in a 6 month period before your credit score is affected. Something you should be aware of though - if you apply for a catalogue (not even buying something out of it), or buy a mobile phone (with airtime agreement), each of these would count as a credit search as it is in their T&C that you allow them to do a credit search when you apply for one of these.

Not all your accounts may be listed with a single CRA. There are 3 CRA's in the UK. Some you can see free online (if you cancel within 30 days), and you can also request a copy through the post for £2 each
http://www.moneysavingexpert.com/banking/credit-rating-credit-score#your

To improve your credit score, i would use a credit card, but make sure it is paid off in full so that you are not charged any interest. This will allow the lenders to see on your credit report that you are making payments on time and this should increase your credit score. It is also important to make sure that your details are correct (no errors in the address or variations of an address) and that they have you listed as being on the electoral roll (at the correct address). That's why it is important to check your details are correct with all 3 CRA's.

hsann

I have a credit rating of 999 and my OH has about 745 and yet we are being refused credit. We were told this was because we had too many accounts although we were always up to date with our payments. (lots of the accounts were very small figures as we never understaood the principle of credit reporting and rating). We decided to rectify this problem so paid most off and and moved an expensive holiday ownership loan to Halifax. Halifax interest was high but as it was better than the rate of the original holiday loan, we went for it hoping to look for an even better rate in the near future.

I recently checked our credit report and found that Halifax had updated our credit report but rather than record the principle owned, Halifax recorded in both our reports ,the total of the principal and the interest so now it appears that we owe more than we actually owe. This method of reporting is very different from what I had experienced with other financial institutions before. They always report the principal only.

I called Halifax to query this but the staff insisted that is their practice. I think reporting this loan this way is deceptive as other lenders may assume that the 'P + I' recorded is the amount owed. Because of the high rate of interest we hope to try for better rates from other lenders in the near future and we are concerned that this may be difficult as it might be difficult to convince them that the amount stated in our credit report is more than what we actually owe. We feel like we are in a worst situation than when we started because of Halifax's policy.
I have contacted Halifax several times and the staff have not been helpful. what do I do now?

GeorgeUK

Unfoertunately the credit rating that CRA's give you don't really mean much on their own. They don't take into account your salary for starters, so all they can really say is whether you are good at making your payments in a timely manner.

I have not been able to find anything that states what a lender should put on a credit report, whether it is the actual balance or the credit limit. Could the interest br front loaded, or have they added the payment protection insurance to the total?

If you are having difficulty getting a good rate, remember not to have more than 3 credit checks in a 6 month period so you do not appear to be high risk, and possibly also look at opening a Credit Union account. They sometimes give reasonable rates for loans when the high street lenders won't.

moneysavingallday

Does it count as a "hard search" each time a company you already have accounts with searches you again. For example, you have an overdraft with Natwest. You ask them to increase your overdraft limit and they credit check you. Does that turn out as a soft or hard search since you're already their customer?