Is there any point in 'Rebuilding Credit'....

Royal01

I've paid all of my credit committments (mobile phone, bank, credit card etc) on time with all green's on my file for the past 2 ish years...

However, this seems to mean absolutely nothing when it comes to getting a loan if you have defaults on your file....mine are from 3 ish years ago when I lost my job - the last one is due off my file in 2012 I believe....

But why try to re-build credit? What good does it do? Is it just so that in 2012 when the last default is off my file, I would be in a better position?

I was always led to believe that it would have an effect after the first year of satisfactory payments?

Despite my best efforts - I am still unable to get a small loan.

CLAPTON

are all the defaults now fully paid off and marked as such?

why do you want a good credit rating

Wutang_2

Royal01 wrote: »

I've paid all of my credit committments (mobile phone, bank, credit card etc) on time with all green's on my file for the past 2 ish years...

However, this seems to mean absolutely nothing when it comes to getting a loan if you have defaults on your file....mine are from 3 ish years ago when I lost my job - the last one is due off my file in 2012 I believe....

But why try to re-build credit? What good does it do? Is it just so that in 2012 when the last default is off my file, I would be in a better position?

I was always led to believe that it would have an effect after the first year of satisfactory payments?

Despite my best efforts - I am still unable to get a small loan.

Being led to believe that after a year everything would be alright was possibly the misconception you should have checked first...

In essence, you have had the money available to pay off all of your outstanding debts and now you need a loan!

You're right that 2012 will be the time when things will get easier but also currently lenders are being a lot stricter than they have previously been for a few years - for all the obvious reasons.

I think even Black Horse have tightened up.

Wutang_2

CLAPTON wrote: »

why do you want a good credit rating

A shot in the dark - but for a loan I would say

Royal01

In essence, you have had the money available to pay off all of your outstanding debts and now you need a loan!

Hmmm...that makes me feel like I have to explain myself - that happens alot on here!!!

The loan is required for a car (not a big loan, just so I can get something reasonable and reliable)....reason for new car is mine is on its last legs (as told by 3 separate garages including the one that my employer uses), I have a job that is in the middle of nowhere and I do mileage for work on it too...I was only after 2 or 3K just so I could get something reasonable...had enough of really cheap bangers that you end up spending more and more on to keep on the road, let you down at the worst possible times (as a female that travels alone all the time, not ideal) and just don't last.....in my experience big waste and drain of money...

Not saying that I thought 'everything would be alright' after a year, but that it should have some effect....ie: wouldnt' get an £11K loan (not that I would want one anyway!) but could possibly get £2K kind of thing...

A shot in the dark - but for a loan I would say

You got it!!! But then, why would anyone not want a good credit rating anyway?

Black Horse said no to me!

CLAPTON

The answer is to save for things you want.

Having once had severe debt problems, the lesson to be learnt is to save then spend.

A good credit rating is a matter of fact... that is you don't default... and you haven't said whether all your defaults have been paid in full or not (that will influence your credit rating).

To save a couple of grand shouldn't be a major problem if you can afford to pay the loan off with additional interest.

Having a good credit rating has some benefits... getting a mortgage at a good rate, a contract phone (well maybe), a Credit card for the convenience as long as its paid in full each month, some utility companies credit accounts, decent bank accounts...
but a loan is NOT one of the benefits of a good credit rating; it's the cause of endless problems, heart breaks, broken relationships, lost opportunities