How to interpret a credit report

MoneySpendingExpert2011

Hi - I have had this thread (https://forums.moneysavingexpert.com/discussion/3998533) on DFW boards - summary below.

Summary:


I have got the statutory credit reports from Equifax and Experian together with the free report from Noddle. Can someone please help me interpret the data and estimate my credit rating?

A bit of background, I ran into some financial trouble a few years ago (2006-08), where my payments were a few months late but I settled all the accounts by June 2009. I had one account which has a "satisfied default" which was registered in Sept 2007. However, 4 years on my credit rating still appears to be very low - the rate I tend to get offered in significantly higher than the advertised rate.

Please find the details about my situation below:

1. I have lived at the same address for 8 years but had not been on the electoral register till a couple of weeks ago

2. I have 2 current accounts both with overdrafts that have been used recently. I have been within the boundaries of the OD limit (sailed close to it but never exceeded it in the last 3-4 years).

3. 5 credit cards (2 had 0% promotional rate for balance transfer which I took up and have been paying minimum or close to minimum on it; 1 capital one card with £500 limit which I have not used for months; 2 regular credit cards which get regularly used and the repayment varies, some months its minimum other months more than the minimum - i have unfortunately had to use this for a couple of cash advances in recent months). I also have 1 charge card (AMEX) which has always been up to date.

Do you know how long the cash advances will continue having an impact? Is it 12 months?

4. I have one loan which I got in Jan and is up to date. The rate is 21.9% hence why I think my rating is absolutely sh!te!!

5. I have had a few searches (around 10-12) in the last 12 to 18 months.

6. I have recently had loans which I have repaid early (in less than half the agreed term).

I do admit that the ratio to credit card balances to limits would be about 75 - 85%.

Is the default causing the problems? How much of an impact do cash advances have on credit ratings? What is the best way to sort out my credit rating? Any advice will be greatly appreciated.

Additional information:

Debt to gross salary is c75% (debt to net salary is a more scary c120%)

Does anyone have any more advice on it?

Thanks,

MSE2011

izools

Debt to income is way to high
Recent searches are way too high
What is your debt to limit ratio (% of credit used)?

You need to look at a DTI of under 50% to be considered for further credit. You also need to use as little of your available credit as possible - over 66% is a definite risk signal.

Hate to judge but it sounds like you aren't making the sacrafices you need to in order to become solvent. You owe too much to be buying things like season tickets.

MoneySpendingExpert2011

Thanks for the reply

izools wrote: »

Debt to income is way to high

Agreed. Question is what is the measure that is use? Debt to gross income? or Debt to net income? Additionally, what is regarded as being ok/good?

izools wrote: »

What is your debt to limit ratio (% of credit used)?

65 - 70%

izools wrote: »

Hate to judge but it sounds like you aren't making the sacrafices you need to in order to become solvent. You owe too much to be buying things like season tickets.

Season ticket loan for the travelcard, which I use to commute to work.

I disagree with your statement above, the only sacrifice I have refused to make is my charity commitment. Link to my soa https://forums.moneysavingexpert.com/discussion/3976799

izools

Oright, fair enough, apologies for the judgementalness

Regards to DTI calculators, some use NET, some use Gross, but as a rule of thumb if your indebtness exceeds 50% of your gross annual income, you owe too much.

Just need to keep beavering away as best you can at your debt without spending a penny on non-critical expenditure. Found out the other day my OH spends £2,500 a year on Cola / Coffee but it does't register to his mind as it's only £1~£2 per transaction.

It's that sort of thing where real savings can be made.

Good luck! :beer:

MoneySpendingExpert2011

izools wrote: »

Oright, fair enough, apologies for the judgementalness

Can easily happen, no offence taken

izools wrote: »

Regards to DTI calculators, some use NET, some use Gross, but as a rule of thumb if your indebtness exceeds 50% of your gross annual income, you owe too much.

Thanks for the info, hoping to get this down ASAP!

Was hoping to shuffle some of my high interest debt to lower interest but by the looks of it that won't be happening any time soon.

izools wrote: »

Just need to keep beavering away as best you can at your debt without spending a penny on non-critical expenditure. Found out the other day my OH spends £2,500 a year on Cola / Coffee but it does't register to his mind as it's only £1~£2 per transaction.

It's that sort of thing where real savings can be made.

Good luck! :beer:

I know exactly what you mean, a spending diary is a real life saver

izools

Just had a look through your SOA. Wow; you're doing well to face that challenge head on.

Although the loan you took out in Jan - did you use that to consolidate other debts?

MoneySpendingExpert2011

izools wrote: »

Just had a look through your SOA. Wow; you're doing well to face that challenge head on.

Thanks, have made some more changes since. Will update the SOA at the end of the month

izools wrote: »

Although the loan you took out in Jan - did you use that to consolidate other debts?

Used it to reduce my barclaycard and amex balance (mostly amex)