How long to restore credit rating?

Metermaid

My son is 25 and has 4,500 on a credit card and 500 on a store card. He is about to pay off both. He has been in fulltime employment since he was 16 and has a current account which his wages go into.

We know he currently has a bad credit rating as he has been refused a mobile phone contract on more than one occasion.

Once he is debt free how long will it take before his credit rating reflects this? Will he be able to get a phone for instance?

Also, should he cancel the cards once paid off, or just cut them up but keep the accounts?

TIA for any advice

TheEffect

Don't cancel the cards. They are currently giving him a GOOD credit rating. You need to pull up his credit reports from Experian (creditexpert.co.uk) and Equifax (equifax.co.uk). You need to look over his credit reports and find out what information is on the reports that is giving him a bad credit rating.

Having credit accounts such as credit cards/store cards give green 0's each month they are paid, to show he is paying on time, and therefore giving him a good credit rating. Closing all credit accounts will make his report stay like it is for 6 years. He needs to keep the credit accounts and pay them each month.

Things that cause a huge problem when applying for credit is A) Not being on the electoral role. He needs to check is he's on the current electoral role. His credit report will show this from either one the companies listed above. Lots of searches. Each time he applies for a phone contract or anything that involves credit, a search is left on his file. A lot of these searches 3-6+ within 6 months can damage his credit report temporarally (12 months, then they drop off). C) Deafults/CCJ. If he has not paid for debt he has owed, he may have been given a default. A default is given when he has not paid his credit card/other product for multiple months. He would have been sent a letter if he was defaulting on a card.

There is other reasons, such as a CIFAF, which means he's been flagged as doing something fraudulent, such as lieing about his income when applying for credit. This will show on his credit report.

Basically, get his credit report from the companies listed above and find out the reason he's being declined for credit.

debtdestroyer007

i agree paying off debts will not help his credit rating as long as debts are not currently defaulted, just look at his credit reports........ that should tell the story

Metermaid

Thank you so much for the detailed explanation, I will follow your suggestion and obtain his credit report.

Just one other thing, he isn't on the electoral register - other than when one of those cards pops through the post, is it possible to get registered? and if so how?

Thanks both for replies, much appreciated

digitalphase

It could just be that he isn't on the electoral roll then, once he's on it he will probably be able to get credit

It's worth checking the CRA's every few months to make sure everything's OK.

TheEffect

Metermaid wrote: »

Thank you so much for the detailed explanation, I will follow your suggestion and obtain his credit report.

Just one other thing, he isn't on the electoral register - other than when one of those cards pops through the post, is it possible to get registered? and if so how?

Thanks both for replies, much appreciated

That's most likely why he's not getting credit then. Pop into your local council office or go to your councils website and there will be a form. Pop your name, date of birth, address etc and then they will put you on the next Electoral Role.

ste_coxy

Metermaid wrote: »

Thank you so much for the detailed explanation, I will follow your suggestion and obtain his credit report.

Just one other thing, he isn't on the electoral register - other than when one of those cards pops through the post, is it possible to get registered? and if so how?

Thanks both for replies, much appreciated

He can get registered on here: aboutmyvote.co.uk

He will also be able to vote in the upcoming elections if he does so in time

Metermaid

Thanks so much for all the help - he's now registered to vote and we got his free credit report - things were much better than we had expected. He's paid off the debts and is now on an even keel.

Again, thanks