Improving credit rating

Timski

Hello, I have recently been refused credit for a new phone. Would reducing the credit limit on my credit card improve my rating? It is currently at £5000 but I never go over £1000 and pay it off in full each month. I was thinking of reducing the limit to £1500. Would this help?
Thanks,
Tim.

milliemonster

I would firstly get hold of your credit report to see if there is anything adverse on there, if you only have £5000 of availabe credit and are using max 20% of this and have a decent income, then it seems strange you have been refused a mobile contract, have you missed any payments or been late with anything lately?

darcyvuqua

hi there is a lot of factors join the sub prime thread there is alot of knowledge in there

Timski

Milliemonster as background I have a mortgage since nearly 2 years (no missed payments - paid a 10% deposit), 1 credit card (pay off minimum each month as is 0% for a few more months - hope to do a 0% transfer but worried i won't able to now) and another card (the one with £5000 credit that I pay off in full every month). I recently asked to extend the credit on the 0% card from £3000 to £5000 for doing my flat up and was refused (silly mistake in hindsight) and today was refused credit for a new phone (no missed payments on current phone). Was thinking of paying some of the 0% card off to bring down the balance (currently £2500) and reducing limit on other card. Would that help?
I checked my credit history about 1 year and everything was correct. In process of joining experience's free trial to get a more recent one.
Thanks, Tim.

NickX

This is very strange. Mobile Phone contracts are usually much easier to obtain than Credit Cards and Mortgages which you have been successful with.

I would be tempted to speak with the Phone provider and see if you can find out their reasoning.

As others have said check your Credit Files for any anomalies that could be causing the problem.

Good Luck.

milliemonster

It seems like it may be an affordability issue, esp if you were refused an increase from £3000 to £5000, however that may just have been because lenders have been tightening their lending lately with the credit crunch so I really don't know

I would definitely check your report again just in case something shows up on there, I think yes if you can pay some of your balance off and reduce your credit limits that will all go in your favour anyway but it may take a couple of months to all filter through to your credit report to enable you to get a mobile again

Moggles_2

I recently asked to extend the credit on the 0% card from £3000 to £5000 for doing my flat up and was refused (silly mistake in hindsight).

If this is an introductory 0%, I wouldn't attach too much importance to this refusal. It's not uncommon for lenders to turn down requests of that order, especially during the 0% promotion period.

Moggles_2

Would reducing the credit limit on my credit card improve my rating?

Not necessarily and reducing the limit to a mere £1500 could make things worse.

Obviously, we don't know your annual income, but I would think carefully before reducing your credit limits. Lowering limits leaves no record on your credit file of the former more generous ones. Nor will your credit files show they were reduced at your request (as opposed to the lenders' decisions). Lowering credit limits can affect future applications for credit, if you overdo it.

Bear in mind that potential lenders cannot assess the way you handle credit directly. The best indications they have are the payment history and credit limits on your existing cards with other lenders.

Perhaps your Experian credit report can help solve this mystery. If not, I would check your Equifax file.

Timski

Thanks Millie. I have contacted Equifax and they have suggested the only potential problem is that I have only been registered at my current address for about a year and a half.
I have also contacted 02 and they have asked me to send a copy of my credit report to their credit referral team and then they will advise me on why I was rejected. Apparently 02 do like at least people to have a minimum of 3 years at their current address. I don't like the idea of sending such confidential information but Equifax suggested this course of action too. So I will send it recorded delivery and ask them to return it to me too.
Thanks,
Tim.

DanDan123

I got an O2 Iphone contract about 2 months ago, and i have only been at my address for about a year! And never had a contract from O2 before.

soul619

DanDan123 wrote: »

I got an O2 Iphone contract about 2 months ago, and i have only been at my address for about a year! And never had a contract from O2 before.

i got an iphone 3g when it came out no problem an iv only been in my address 2 years plus i defaulted on an o2 contract 5 years ago