1 Year challenge to boost my credit rating!!

cbsoton87

Hi everyone!

Right.. I've decided to take it upon myself to try and drastically improve my disappointingly low credit report.

After 4 years as an ignorant (ignorance is bliss, right?!) student, I have given myself an awfully low credit score.

Now, after reading up on credit scoring loads, I know that there is no such thing as a 'universal credit score' and that lenders look at lots of different information, based on the three main credit scoring companies. I have since ordered my credit report from Experian and I was pretty shocked at just how bad and messy it was!!

In the past year I have missed 13 payments!! Now these will stay on my account for up to three years??!

I have had 3 searches in the past six months - two of these were applying for a different current account, which I was then rejected for, and one search was from Experian themselves.

In total I have seven defaulted accounts which makes me wanna cry!! To be completely honest, I don't know how to start boosting my credit report with it being so bad!

In terms of debt, I don't have an awful lot. I have managed to set up payment plans with various companies, and I can see the light and the end of the tunnel.

Just to make things clearer, I'll list my debts - those still outstanding, and those which have been paid off. Then I'm hoping those who've been in similar situations, or just anyone nice, can help me out by giving advice etc.

DEBTS:
1. Barclaycard - £1349
Defaulted on: 09/12/2009
Debt still outstanding, but set up payment plan of £75 per month

2. Capital One - £950
Defaulted on: 15/07/2009
Debt paid off to 'settled' status. £237 still remains unpaid but I apparently do not have to pay this.

3. Natwest Student Credit Card - £600
Defaulted on: 07/11/2008
Debt paid off. 20.06.2010.

4. Scottish Power - gas - £114
Defaulted on: 28/05/2009
Debt unsettled at moment because I didn't live at the property so there is an ongoing dispute. Am awaiting a copy of my contract to send to Scottish Power, and am hoping once they receive this they will remove any defaults.

5. Scottish Power - Elec - £273
Defaulted on: 28/04/2009
Debt unsettled at moment because I didn't live at the property so there is an ongoing dispute. Am awaiting a copy of my contract to send to Scottish Power, and am hoping once they receive this they will remove any defaults

6. Nationwide Current Account - £400
Defaulted on: N/A
Debt paid off: 3/12/2009

7. Natwest Current Account - £1,250
Defaulted on: 31/03/2010
Debt still outstanding. Have set up a payment plan of £75 a month.

8. Natwest Current Account - £1,579
Defaulted on: 28/02/2010
Debt still outstanding. Have set up a payment plan of £75 a month.

9. Lloyds TSB - Current account - £1700
Defaulted on: N/A
This is my ongoing account. I have my wages paid into this account. Whilst I always live in the minus, I rarely go over the limit or miss any payments. I do not have to worry too much about paying this off until I paid off my other debts first.

So there we go...

I do have a rather heft debt, but as I said, I have now gotten my repayments under control and am managing to pay them off. the total repayments I make per month = £225.

My basic take-home pay is - £950 per month as I work part time (still a student). My rent and all bills come to £300 a month so at it stands, I'm managing ok in terms of money at the moment.

What I would really appreciate is any advice to help me clear up my credit rating. It is catastrophically low and it is really stressing me out!!

I have registered to vote at my new permenant address so I know this will help. Is there anything else I can do?

All advice and support/suggestions welcome!

Thanks!!

Happytogetdebtfree

Hi and welcome don't have any great tips I found the ones martin give are pretty much the same as what anyone would say here. While you don't need credit don't apply for it start paying on time if this means arranging a direct debit so bills are paid on time., keep a spending diary and overpay where you can. And try to get out of your overdraft... You may not be getting credit due to owed amounts now and the litte wage you have in comparisson to what you owe. That should improve as you get a full time job. 950 a month for part time is good.. Depends what you do. Of you post a proper statement of affairs we can look and help with cut backs. Also why are Scottish power chasing you if you did not live at the address? What contracts are you sending them doneverytjing by recorded deliverey

[Deleted User]

As mentioned above the ratio of debt/available credit to income will hinder any credit applications - this will resolve itself when 1) you close the accounts as they are paid off (which you should do as a matter of course - but keep one credit card for emergencies, and if you use it pay it off in full every month), and 2) your income increases (which I'm assuming is likely when you are working full-time/finished being a student).

Also, given that your outgoings are so low (rent and utilities) perhapse you could start overpaying what you owe and reduce the debt/available credit ratio.

DarkConvict

Late payments stay on file for 3 years, and defaults/CCJs for 6 years. The fact that this information lasts means that you cant simply repair it in 12 months.

The Scottish power dispute should be easy to settle, you can only be charged for utilities whilst you are there, simply send a copy of the old/new tenancy agreements.

Have you look into super balence transfers, can you move your overdrafts to interest free instead of spending ~£30+ a month on interest on it.

cbsoton87

Thanks for the replies already!

Firstly,
The Scottish Power thing came about as I lived in a student house. It was during a time when I was trying to make a little money through a cashback site.. anyways, I saw a £50 cashback deal on Scottish Power but as I was due to move out soon I only placed an interest in the deal rather than signing anything.

Of course, as soon as I moved out of the property Scottish Power must have sent letters through in my name. As I had moved etc, I completely forgot about registering an interest with them and have a sneaky feeling that the tenants who took over from me opened an account in my name.

I've asked Scottish Power for proof of a contract... they turned around and said it was only done online ( a simple checkbox online under my name.. no signature). They say as soon as I send them a copy of my tenancy agreement (which will state i moved out on 30th June - a month before the power started being supplieed), then they will remove defaults and charges against my name. This would be simple enough if I had a copy of my contract! Living in a shared house we had only one contract master copy between us all.. and this was given to the most organised housemate (who sadly for me, managed to escape all bills repsonsibilities, which I was lumbered with).. anyways, she's destroyed the contracts for our houses as it's been three years now. I have since written to the landlord to ask for a copy of the contract, and no reply. His old telephone number does not work.. so I'm a little stuck on that front now...

In terms of balance transfers - yes I've read up on these and would love to be able to do these. Unfortunately, when I applied a while ago, I was declined for even a Vanquis credit card - that is how bad my rating is.

I have written to old companies/banks etc to formally close the account once they've been paid off - but like I said, they will remain on my report for 6 years as they've all been defaulted etc.

I know I cannot repair my report in a year when I'm dealing with tarnishes lasting for 6 years.. but I'm challenging myself to boost where I can this coming year.. which means drastically reducing my debt... and maybe if there is a miracle I can even pay off the overdraft too!!

In terms of SOA... i'll do one now!!

DarkConvict

Your tenancy agreement, was it done via a letting agency? If so they will have a copy, was your deposit stored in a deposit scheme, if so this should have dates of repayment matching the end of the letting.

Do you have another other records to indicate your dates, an agreement of the old (end date) or new (start date) house you said at. Maybe registration for the (voters) electrol roll. Any other agreements that you took out around that time at the new address? Change of address on driving license etc?
As you say ti was shared accommodation so it was indeed possible you personally never had a copy.

savingholmes

Look forward to seeing your SOA

I would ignore your credit rating for now other than to focus on paying your bills on time every month. Set up standing orders or direct debits to achieve this. That alone - not missing the payments will have a significant impact on your credit rating.

Stop applying for credit or even current accounts if you are not sure you will be accepted - being turned down once for credit can easily become a whole series of "no"s on your account and failed applications wreck your credit score too. I would suggest that you perhaps wait at least 6 months before applying again....

If you have a good record on meeting your payments over that 6 months or so things should improve for you...

HTH

cbsoton87

Unfortunately we went through a private landlord who gave us a very good deal. Tho i am paying the price now eh? In terms of other deals or official contracts... none apart from applications for credit which were logged on experian. Do you reckon that would suffice? I guess its worth a try..

Here is my SOA.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 950
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 950

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 30
Electricity............................. 15
Gas..................................... 7.5
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 0
Mobile phone............................ 21.5
TV Licence.............................. 5
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 40
Clothing................................ 40
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 406.5


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds Overdraft...............1700......75........0
Natwest........................2829......150.......0
Barclaycard....................1349......75........0
Total unsecured debts..........5878......300.......-


Monthly Budget Summary
Total monthly income.................... 950
Expenses (including HP & secured debts). 406.5
Available for debt repayments........... 543.5
Monthly UNsecured debt repayments....... 300
Amount left after debt repayments....... 243.5

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -5,878
Net Assets.............................. -5,878


According to this, I should be able to repay a lot more per month. I've stopped going out as it's only a drain on finances which could be used to clear up my credit rating.

cbsoton87

Yes HTH, I agree that perhaps I should just try to focus on regular debt repayments etc rather than rating.

savingholmes

cbsoton87 wrote: »

Yes HTH, I agree that perhaps I should just try to focus on regular debt repayments etc rather than rating.

Even in our worst spending days we robbed peter to pay paul to ensure our credit rating always stayed good. So when we joined mse - we were able to get 0% deals easily and repay our debts more quickly.

There are people on these boards who started with over £100K debt and now have £20K debt and are finally getting offered decent interest rates. They treat mse money creation as a second job to try and get their debts down quicker eg hypno.

Try reading other people's diaries for other ideas and look at the Make £10 a day challenge as a way of bringing in extra money to pay off your debts or fund a few of life's little luxuries... It was that challenge in the beginning that kept me on the straight and narrow as I could spend some money guilt free while paying huge chunks off our debts....

cbsoton87

Yes definitely.

See I set myself this 'one year challenge' as I work well when faced with a pretty tough challenge. Out of this debt palava, I have realised I am naturally an organised person (when faced to finally deal with what is in front of me)... and despite all the stress etc.. I do feel a sense of achievement when I pay off just that little extra cash and/or close down that one extra rubbish account.

I'm gonna spend some time going through debtfree wannabe forum to see what other people are up to. I'm currently in process of decluttering house by selling on ebay etc. Currently made an extra £150 which can go towards becoming debt free!

Thanks to everyone for reminding me that the end is def in sight!