Help - credit rating :(

gelato_cat

Hi everyone

I'd like a bit of advice/insight regarding credit searches.

I've been working for the past 6+ years and have never had a problem getting credit cards with £6k+ limits. In 2003 I got my first 0% card as I was starting a new job and needed to buy a season ticket for the train and was also starting a Masters degree so I needed to pay for that.

Since then I have been shifting the balance about and adding to it. The balance is currently sitting on two cards - Morgan Stanley (£4k, 0% runs out March) and Intelligent Finance (£6k, 0% runs out June).

I also had a few other cards on the go: my two Halifax (permanent) cards, an Egg card, a Sainsbury's card and an Amex which I got for the free Nectar points. I've also got a Debenhams card. I don't have balances on any of these - I only use the Halifax ones from day to day and pay the balances off in full every month.

I should have thought about this sooner, but previously all my debt was on an Abbey card. When the promotional rate expired on that, I had to apply for the IF and MS cards to cover it as neither provider would offer me a limit big enough to cover the whole BT. That should have rung some warning bells, but no!

As I mentioned earlier, my MS 0% rate runs out next month. Imagine my shock when I applied for an HSBC card the other day and only got a credit limit of £2.4k. I realised AFTERWARDS that this was because I had so much unused credit on the go. I therefore cancelled the Sainsbury's, Egg and Amex cards.

I then thought I'd apply for another card to cover the rest of the BT. I tried to apply for a Post Office card but at the end of the online application it said it couldn't give me a decision straightaway and that they would write to me within five days! So presumably this means they are declining me.

I am worried because this has never happened to me before and I am worried I've damaged my credit rating by applying for too many things at once. Ironically, paying the debts isn't a problem, I have the cash to cover them, I just prefer to keep it earning interest for me rather than the banks! I am also about to be made redundant so I don't want to eat into my savings too much! However I am sorely tempted now to pay off the MS debt I can't transfer plus maybe the amount that I transfer to the new HSBC card and get rid of that problem altogether (and cancel the two cards), then worry about the IF balance when that promotional rate expires in June.

What I would like to know is, if I have been declined because I've applied for too much at once, how long will it take to repair this? Once I have finished with the MS and HSBC cards I fully intend to cancel them, thereby leaving me with just my Halifax, Debenhams and IF cards (ie the bare minimum). The IF rate expires in June, so I'll need to apply for a new 0% card in May - will my present mistakes affect any searches carried out in May?

Can anyone share their experiences with me please?

many thanks

Suze :mad:

moneyfool

Nice one ! seems like you are screwing the credit card companies nicely! why cancel cards? just leave em dormant till you need em. Why not pay the £2 fee per credit report to Experian etc and see how you really stand in their eyes?
Martin has pre-formatted enquiry letters for you to print and send off for your very own credit rating elsewhere on this site, once you know that (for very little money) keep on screwing 'em babe!
Oh, PS HSBC are like that NOBODY gets a lot of balance tx from THEM!

gelato_cat

Not really - it's a source of stress :eek:

I forgot to mention that I have ordered a copy of my credit report but this will only state the facts and won't give me any information on how banks will score me in the future.

No point leaving the cards dormant as that's how I got into this situation in the first place - too much unused credit lying around. Shouldn't be a problem now I've cancelled them but I just need to know how long it will take for my credit record to look half-respectable again.

cheers

Suze

moneyfool wrote:

Nice one ! seems like you are screwing the credit card companies nicely! why cancel cards? just leave em dormant till you need em. Why not pay the £2 fee per credit report to Experian etc and see how you really stand in their eyes?
Martin has pre-formatted enquiry letters for you to print and send off for your very own credit rating elsewhere on this site, once you know that (for very little money) keep on screwing 'em babe!

Joe_Bloggs

@Suzey
This is just my view.
It appears that you are £10K in debt. Lenders don't have access to your savings accounts so they can only make decisions on what their stupid software tells them. Do you really have the savings to back up your debts or are you in a debt spiral, living beyond your means ? The impending redundancy may affect the employment checks made by lenders.

It seems settled accounts stay on your credit record for six years.

Some personal questions you need not answer.
Are you going to be a full time mature student ?
Will you get a redundancy settlement ?
What happens to your pension contributions ?
Good luck anyway.
J_B. (No Mug)

gelato_cat

Yes, I really do have the savings. But, like I said, I may not have an income soon as I am being made redundant, so I want to keep hold of my savings for as long as possible.

I am looking for a new job and do not intend to be a full-time student.

I will get a redundancy settlement but it will be the bare minimum required by law.

My pension contributions will stop until I find another job.

Any ideas about the credit rating?

cheers

Suze

Joe_Bloggs wrote:

@Suzey
This is just my view.
It appears that you are £10K in debt. Lenders don't have access to your savings accounts so they can only make decisions on what their stupid software tells them. Do you really have the savings to back up your debts or are you in a debt spiral, living beyond your means ? The impending redundancy may affect the employment checks made by lenders.

It seems settled accounts stay on your credit record for six years.

Some personal questions you need not answer.
Are you going to be a full time mature student ?
Will you get a redundancy settlement ?
What happens to your pension contributions ?
Good luck anyway.
J_B. (No Mug)

Joe_Bloggs

@Suzey
When I mentioned pension contributions I was concerned about a company pension. What rights do you have ? Can you transfer the benefits ? Get the money ? I am also clueless about pensions.
Credit ratings are a mystery. I received my first ever refusal from LTSB in November. To appeal I would have to show the actuaries my credit file from Experian. It seems that they don't have access to the full details. They were pretty vague as to why I was turned down but very polite. They would not have made a penny from me as the 0% cash would have been stoozed in an ISA and paid off my Egg 0% anniversary deal. I had closed down around 15K of credit limit two months before and only needed to transfer 6K. I did not wish to send my confidential information so I paid off the Egg card from existing savings. I have not applied for a card since.

Would your savings count against you when claiming state benefits ? Yet again I don't know the answer. There are many experts in these forums who could help with details. I don't think pursuing credit is the way to go.

I can understand the added security of borrrowing money at 0% and having it in your accounts for troubling times.

Regards J_B.
PS. Can you still afford to study given the redundancy situation ? What subject are you studying ?

Victors_Bruvver

moneyfool wrote:

Nice one ! seems like you are screwing the credit card companies nicely! why cancel cards? just leave em dormant till you need em. Why not pay the £2 fee per credit report to Experian etc and see how you really stand in their eyes?
Martin has pre-formatted enquiry letters for you to print and send off for your very own credit rating elsewhere on this site, once you know that (for very little money) keep on screwing 'em babe!
Oh, PS HSBC are like that NOBODY gets a lot of balance tx from THEM!

moneyfool do you know where these pre-formatted enquiry letters are are please? I think I am in the same situation as Suzey; too many unused cards - see my recent posting on the subject for further infomation.

Experian_company_representative

If you want to order your Experian statutory credit report you can apply online by visiting https://www.experian.co.uk and following the links to £2 credit report. Alternatively you can get your credit report for free when you try Experian's CreditExpert monitoring service for 30 days. If can take a trial but cancel before the 30 days are up you pay nothing at all and can view your live report as many times as you like until then.

muffle_2

I have found that once you get to a certain number of cards and a certain level of 'potential' debt they stop accepting you.

I used to have no problem getting platinum credit cards with 0% offers, now I have 7 and get declined every time, not just for cards but also personal loans and even bank accounts with overdrafts. In total my credit limits amount to about £30K which is my approximate yearly income.

This is despite the fact that I pay off all my credit cards in full every month. Unfortunately the credit report does not state this - it only shows the balance from the last statement (which can be months out of date) and whether the minimum payment was received over each of the past 36 months.

So in reality I feel this theory of constantly swapping 0% offers only really works for a short amount of time, and only for those who only have one or two cards already. Once you've amassed a few cards I think you'll find it very difficult to apply for more credit.

It's a bit frustrating for me because I would like the backup of knowing I can get a 0% offer if I ever need to run up a balance, and I also can't get the good cashback cards after my existing cards reduced their cashback so much.

It wasn't clear from your post how many applications you've made in total recently, but these will also definitely affect your ability to get credit. It takes 12 months for these searches to be cleared off your report.

As for closing credit card accounts, it takes 6 years after the debt is paid off for them to disappear from your report, so the benefits of doing so are questionable.

YorkshireBoy

muffle wrote:

...it takes 6 years after the debt is paid off for them to disappear from your report...

It takes 6 years from the account being marked as 'settled' for them to fall off your credit report.

...the benefits of doing so are questionable.

The benefits of doing so are two-fold...

1. Your ability to 'spend' this available credit is removed, and

2. A high limit on a 'settled' account, coupled with payments on time, shows any future lender that you are able to manage high levels of debt/available credit.

muffle_2

YorkshireBoy wrote:

It takes 6 years from the account being marked as 'settled' for them to fall off your credit report.

Yes correct, but I was trying to simplify the explanation to make it easy to understand. As I said above, the information on the report can be months out of date. Some of the credit card entries on mine as of today were last updated in November!

YorkshireBoy wrote:

The benefits of doing so are two-fold...

1. Your ability to 'spend' this available credit is removed, and

2. A high limit on a 'settled' account, coupled with payments on time, shows any future lender that you are able to manage high levels of debt/available credit.

It all depends on how the lender analyses the credit report information. I wouldn't put any faith in their systems. I was declined a balance transfer with Barclaycard simply because there was a notice of correction on my file.