How long does good credit rating last?

jfh7gwa

Just a question i was wondering about...

My problem (that's in the process of being fixed) was that I've never really used credit, so until September I haven't been 'on the radar' to be able to prove I can manage money.

I'm paying a small amount onto my Cap One credit card every month (<£30) and paying it off the next, regular as clockwork. No problems so far.

but what happens if I do this for a year, then don't put anything on my credit card for 5 years.... in 6 years time will my credit rating be back to "blank slate" status?

i..e how long does the credit building work / is remembered for?

if i eventually plan to get a mortgage in a few years, would i be best just continuing to put my week's food shopping on there at least once a month to continue to show a good credit history for those years... or is my good credit building activity remembered for a few years?

Does good credit building work decay after a while inthe same way as bad debts (judgements etc disappearing after so many years)?

brians_daughter

It stays on file 6 years so any payments (late, on time whatever)a re recorded. If you never miss a payment you would be considered to be less of a risk. However, a universal good credit rating doesnt really exist although obviously not missing payments, not too much debt etc all is important. Some lenders will only check bacj 3 or 4 years

My mother was turned down for a santander current account a few weeks ago and shes never missed a payment in the 40 years shes had a mortgage/credit card/mobile phone etc income to debt ratio is low, has closed accounts, existing account etc . Every lender is different and wants different things from a prospect customer.

jfh7gwa

brians_daughter wrote: »

Every lender is different and wants different things from a prospect customer.

yes, absolutely - including the angle of "will we make any money by accepting this customer", most likely

thanks for clarifying the reporting time period - i wasn't sure if it was just negtive stuff that stays for 6 years. thanks for confirming it's ALL data (repayment history) that's reported.

CLAPTON

jfh7gwa wrote: »

yes, absolutely - including the angle of "will we make any money by accepting this customer", most likely

thanks for clarifying the reporting time period - i wasn't sure if it was just negtive stuff that stays for 6 years. thanks for confirming it's ALL data (repayment history) that's reported.

all the data is shown on the reoport for 6 years many lenders will take most notice of recent history rather than 5 year old history

so you would be better to use the card regularly and pay in full each month

Johnny_C_2

If you're happy spending a small amount each month and have a DD in place to pay the whole lot off each month, you should find a cashback card so you actually make money by building up a good credit history.

You need to find one where you would spend enough to justify any fees - e.g. Santander's 3-2-1 card - you pay £24/year, but get 3% of fuel back. So you need to spend £67 or more per month to make it worthwhile.

If - like me - you spend £200/month on fuel, you get £6 cashback/month, £72/year so taking the £24 fee off you make £48 a year. Okay I know you're not going to get a free car with that but £50 for free is £50 for free.

jfh7gwa

Johnny_C wrote: »

If you're happy spending a small amount each month and have a DD in place to pay the whole lot off each month, you should find a cashback card so you actually make money by building up a good credit history..

That's exactly my reason for getting a sub prime card - i wanted a cashback card, got rejected, started looking at my history, saw i was a blank slate, and am working on fixes over the next year.

then next summer i'll try for a cashback card again.

(i hadn't realised until this year our mistake of putting everything, literally everything, in my husband's name on accounts and financial statements, with me e.g. as the secondary card holder on previous credit cards and stuff. we're fixing this by mixing them up a bit now. we've always both been on accounts where possible, but now we're making me the primary account holder for roughly half our stuff e.g. utility bills. and my capital one card work, described above, will help.)

good tip though!:D

chanz4

apply for the flybe they are easy going, after 6 months you can pay £1 a month and get 1% back off all purchases.