Bad credit rating help

Enji_Benji

Hi

I tried to get an overdraft on my student account however, when doing the final checks, it came up with a bad credit score for myself. I have been in Thailand from August to January, and the only thing that it could have been down to would be my phone bill payments. I called up Orange, and they said I payed late for one of my phone bills and would have got a black mark for that (never intentional - if I knew this would have happened, I would have payed it straight away, I always had the money..). It was either January's or February's bill.

The person I was speaking to in Orange said that if I pay my next phone bill on time, as soon as it is ready to be paid for, my credit rating should be 'amended' by the 30th of this month (my phone bill comes out on the 24th).

I'm just wondering if this is true and was he right? How long does it normally take for someone's credit rating to be fixed?

Appreciate any help

~Beanie~

The late payment will still show as far as I'm aware. You can't get it removed if it is correct.

keys_2

I think the late payment will still show. But i know you can write a letter to companies who have bad listed you (i.e Orange) and ask them to remove your history off your credit file .
Also it would be a good idea to send off for your credit file to see what is on there as no credit at all is really hard to then be able to apply for credit .So can be a catch 22 experience sometimes.

jambosans

I agree with keys, although I'm not sure writing to Orange will rectify a blip on your credit rating. One missed payment can effect your credit rating but it can easily be fixed over time - completing the contract without any further late payments, paying off other existing debts, etc can all help to improve your credit rating.

Credit scores are a funny thing, there are external agencies like Experian or Equifax that provide credit scoring - you can obtain a free credit report from them if you sign up to a trial period. When you apply for an overdraft you may be externally credit checked but in many cases banks use their internal credit rating. Basically this is a rating that the bank compiles over time based on your account conduct. If you're a student who heavily uses their overdraft without a great deal of income then that may have an effect on your rating.

In all honesty I don't think your problem is the one missed payment with Orange, it is probably down to the fact you're a student. Essentially your ability to repay on borrowing is effected by studying and not having a full time job, meaning students often have poor to moderate credit ratings. The only way you can improve this is by borrowing and repaying - eg. get a credit card and clear the balance in full each month. Basically if you can show you're "good for it" then that will help your credit score with external agencies. Also, like I said, with internal scores that is normally based on account conduct, so try and pay more in to clear some of the overdraft.

Finally, student overdrafts can sometimes be increased by going through an appeal process with the bank. At this point they may take into consideration the fact you are a student and need the money just now, repaying when you graduate, and the decision can be overridden by underwriting.

Enji_Benji

Thank you for the replies

I checked my credit report today, and I called equifax and it seems that the 'late payment' is not the only thing holding me down.

The 2 things I have been told (and checked myself) that are holding me down are:

1 - problem with Orange which is needing corrected (I have already sent away an email to Orange correction department for that due to being told by Orange I should do this after explaining my case)

2 - too many credit searches in the last 6 months.

I currently have 4 credit searches within the last 6 months. How many is 'ok' to have in 6 months?

Also, is it the problem with Orange, the number of credit searches, or a mixture of both that failed me my credit score with Natwest when I tried to get my student overdraft? If Orange thing was fixed, do you think I could apply again once my credit report has been updated? Or would I still be refused due to 4 credit searches in the last 6 months?

Appreciate help

random_2-2

It will be probably a combination of both but credit scoring depends on the credit scoring within Natwest.

Most banks will not look favourably on lots of recent credit searches.
Think of it this way, if you knew someone have been trying to get a lot of credit recently would you lend them money?

jambosans

It amazes me how selective people can be when reading a reply. There will not be simply two things "holding you down", it's not just about your credit score (without seeing that you cannot asses your credit worthiness based solely on the credit report, they are linked but different), as I said before it also depends on your credit score with the bank.

Like random said, lots of credit checks don't look good, but it's not just about your external rating.

Enji_Benji

when I applied for the Natwest student account I got a credit check done on me then and it was fine - no problems, with an agreed overdraft limit of £1250. That was in February.

1 'late' payment in my credit report and 1/2 more credit checks since then, everything else stayed the same.

jambosans

Enji_Benji wrote: »

1 'late' payment in my credit report and 1/2 more credit checks since then, everything else stayed the same.

The bank initially credit checked you when you opened the account, that normally happens across the board. However like I said most banks keep an internal credit score for customers based on account conduct. Ultimately no one knows your finances better than your bank, so that's why an internal score can be more revealing than an external check. I've never dealt with Natwest personally so they may base decisions purely on an external credit check but I highly doubt it.

I hope that Orange removing the late payment from your credit report works, and only time between credit searches can sort out that one. What you need to also appreciate is that these two problems may not be the only things preventing an increase in the overdraft. Remember NatWest can see how much is paid into your account monthly, so, for example, that amount may not be sufficient enough to allow an increase.

Now I'm using that as an example to illustrate how an internal credit scoring system may work - in reality no one really knows exactly unless you work in underwriting for NatWest. What is known is that internal credit scoring within banks does exist and your external credit report isn't going to reveal everything or fully explain the decline.

Enji_Benji

thanks for the reply.

I managed to get the Orange thing wiped off of my credit report, so hopefully that has sorted it out.