Credit Score Confusion

morbo

Hey Guys,

In the last month or so I applied for an argos card (to buy a nice shiney mac) and got rejected due to my credit rating which I didn't understand as I have no debt, apart from my student loan - which I have been paying off, slowly over the past few years, but I am still paying it - I have no credit cards, no store cards and I work full time and make a reasonable amount of money (18k)

I then went and applied for a credit card from Halifax (my bank) and got refused on the spot for that.

I have signed up to Experian who just robbed me of £6 to tell me my credit score is fine 869 (Just above average apparently)

If my score is fine why would I be refused store cards / credit cards, this stuff hurts my brain!

Any help / advice would be greatly appreciated!

JohalaReewi

Welcome to MSE.

First the so called scores from Experian and Equifax are meaningless numbers. Each lender has their own formula for working out your score so it will vary from lender to lender. Experian are not a lender so their score is not a credit score. So don't waste your money on them again.

What you do need is your credit REPORT. You get this from experian (and equifax) and it will cost you £2 for the statutory report which is all you need. Make sure this shows you as being on the electoral role and that there isn't anything on there that is not correct.

The problem you are likely to have is no credit history.

Have a read of Martin's article...
http://www.moneysavingexpert.com/loans/credit-rating-credit-score?dd

stephane_2

Don't waste your money on your experian credit score....it means absolutely nothing...just a number generated out of thin air. Each potential lenders will have different criteria assessing your application for credit.
Your problem is that you have no or very little credit history, no credit card and no store card, so it is very unlikely that you'll get accepted with a mainstream lender offering you a decent interest rate. Your best bet would be to start at the bottom of the pile with a sub-prime credit card like Vanquis, Capital One, Aqua or Barclaycard Initial, but beware that the interest will be very high, and you'll have to use the card wisely by paying the full balance each months so to avoid paying interest. Once you've managed your account for a good 12 to 18 months, then you'll have more chance getting accepted for a credit card with a good rate

morbo

Thanks JohalaReewi!

I have the report now and there is only one thing that seems out of the ordinary, there is a defaulted account* for o2, it says I owe them £19 which I was totally unaware of, it says it's from 2008, I used to have an 02 mobile but that was a lot longer than 2 yeras ago, Ive been with orange for about 4 years (and they suck, but thats another story!) Could this be the reason they are refusing me credit?

*("A defaulted account is removed from your report after six years whether or not you have paid the debt in full. If you have paid some of the debt off, the balance should show how much you still owe. ")

stephane_2

Default + lack of credit history, you'll find it almost impossible to get credit for the next few years

morbo

Cheers Stephane, that blows! Do you know of anything I can do to get it sorted out, I don't need a credit card but it would be good to know I can go and get one if I need it

stephane_2

The default will stay unfortunately, not much you can do about that. Is the default registered with both Experian & Equifax? If it is that is bad news, if it is only registered with experian and not equifax then you might get accepted for a credit card which only search equifax....otherwise you could try opening a catalogue account, that will help improve your score in the long term...

morbo

The o2 account is in default for £19, if I phone them and just give them the money to get it out of the way would that help - Its not that much money and it would put my mind at rest to know it was cleared?

bobbydrake50

You could try asking them if you agree to pay the balance woudl they remove the default - it is such a small amount so you never know, no harm trying. Best to pay it anyway so at least it shows as settled.

BugsyBrowne

morbo wrote: »

The o2 account is in default for £19, if I phone them and just give them the money to get it out of the way would that help - Its not that much money and it would put my mind at rest to know it was cleared?

You defaulted mate for just £19 which will now trash your credit report until 2014,you have got to ask yourself why should they remove your default?

KingElvis

That default will be a killer no matter how much it's for...sorry