Credit Scores-how Can I Improve Them Quickly??

angeleyes

:eek: :eek: Hi
I am looking for some advice on how to raise my credit score and how long this would take.
I have been refused for a couple of credit card transfers and a loan.
I am on the electrol roll and have 4 credit cards 1 with mbna limit of 2200 bal @2100 another with my bank royal bank of scotland limit 2500 bal 1955 1 with barclay card limit 260 bal of 40 and one capital one with limit of 200 and nill balance.
I was looking to transfer the balance of 2 of the cards and shorten the term of an existing loan and reduce the monthly payments.
The current loan is with my bank for £25,000 and has a settlement figure of £22000 I have £9000 to add to the requested loan of £13500 to pay off the loan. However even though the new repayment would have been lower and shorter I was refused by my bank because they said I had had a few credit searches on my file and would only be able to offer me a loan with an extra 3% apr added.
There has never been any problems with my current loan or bank account -no overdue payments on my credit cards- I have a mortgage which payments have been made on time every month.
I really need some advice on this because as well as looking to transfer the credit card balances and change my loan my mortgage tie in ends in august so I will be looking to get a new deal on that as well.
I need to know what is the best way to raise my credit scores and how longer will this take (sorry for the waffle but didnt know how background to give)
Thanks guys

ps i have posted this also on the credit card site as well wasnt sure which one to go for

dougk_2

This is what I would do:

Clear the barclay card and then close this and the capital one card. Remember to close them and just not leave them there. (i.e. write to the compnaies and tell them to close the accounts and for them to update the credit reference agents accordingly).

Keep paying your loans/ credit cards and try to pay back as much as possible (probably best paying more back to the CC's as higher intrest rate).

I would then avoid applying for any credit whatsoever for a few months (maybe until august). Then try again for the loan OR credit card.... don't do to many at any one time.

angeleyes

:d ...,,,,,,,,,,,,,,,,,

deemy2004

What you do is -
1. Stop applying for new credit
2. keep up the payments on your cards - ON time
3. Give it 6 to 9 months

Then check your credit score - should have improved.

THRIFTY_JO

Please see my reply onthe otehr messdage board for ccredit rating and go from there.I wouldn't recommend moving antyhing until you have that in your hand and it is correct

Thrifty Jo

aardvark0

Would a sensible alternative to closing a credit card account be to ask to have your limit reduced?

I had £7000 on an expensive card, and have managed to transfer £5000 to cheaper cards. If I were to get my limit reduced from £7000 to £2000 on my expensive card, would this be helpful (over time) in improving my credit rating?

zcaprd7

Yes, it should, but not as much as closing it would.


What card is it, might be worth keeping, especially if its run by MBNA (or especially Egg) for the existing customer offers?

aardvark0

It's an Alliance & Leicester card which is indeed run by MBNA.

How would I go about talking them into refinancing my debt at a lower interest rate?

joker998

Hi aardvark0

I'm not so sure that lowering your limit on an existing card is the best thing to do in terms of increasing your credit score.

I build risk assessment scorecards for one of the major credit cards companies and generally speaking, if you have a high credit limit on an existing card, it is an indication that you are credit worthy i.e. if one company gives you £6000 credit limit, in future, other companies may include this in their decisioning process (not the scoring because this is prohibited by law) and offer you a similar limit. In fact, I know of a couple of companies who just take the highest existing limit you have and add 10% to this so if you already have a card with a £5,000 limit, they will give you £5,500 (as long as you pass their scorecard).

In addition, zcaprd7 says that closing your card should improve your credit score - this may well be the case but it'll obviously depend on the institutions scorecard - they may not have the characteristic 'Number of Open Credt Cards' in the scorecard at all. However, if they do, remember that as with the size of the limit, the number of credit cards you hold already will tell an institution something about your credit worthiness e.g. holding 1 is much better than holding none, 2 is probably better than 1 and 3 is probably better than 2. There will of course be a tailing off as the number of credit cards reaches a level most people would deem unreasonable and liable to lead to overindebtedness. Holding 4 or 5 is, in my experience, an adverse risk indicator so you may well be advised to close one of the cards with a lower limit.

In terms of the best thing to do to increase your credit score, I can only reiterate what others have already said...

1) Stop applying for credit (temporarily) - most companies will have a 'Searches' characteristic in their application scorecard. The most common one covers the prior 6 months.
2) Never pay late - always pay minimum payments by DD. Prior delinquency is one of the best predictors of future risk.
3) Get a copy of your credit file from both Experian and Equifax - I say both because the information they hold varies quite a lot in some cases e.g. most companies only register a search with one of the bureaux. So it's possible to have 10 searches with Experian and 0 with Equifax - an extreme example but certainly possible. There may be something nasty in the reports that you're not even aware of - these companies DO make errors - I've seen it happen!

P.S. It's interesting that you can get a £2k limit with one company and only £260 with another - which did you get first - something must have happened to your credit record between the two applications - is your profile getting better or worse?

Sorry to ramble on - hope this is useful

aardvark0

Hello!

Thank you for that.

I don't have cards with such diverse limits; that was Angeleyes whose thread I seem to have hijacked

joker998

Hi

Sorry - That'll teach me to read the thread properly