How can i improve my credit rating which is 'fair' when i pay bills on time & in full

luckylouise08

All 16 credit accounts on my file have been paid on time and in full but my report says i have not held accounts long enough, which is holding me back. How can i improve my credit score? I am on the electoral roll and am in full time work and never been out of a job. Any ways people know that i can improve my credit rating would be highly welcomed. Thank you.

Tixy

Do you have any exisiting open credit accounts?

What types of account do you have on your file that are settled? credit cards? loans? payday loans? catalogues? phone contracts? overdrafts?
how long was the longest one held for?

When you say this is holding you back - have you appled for something any been declined? if so what?

luckylouise08

Tixy wrote: »

Do you have any exisiting open credit accounts?

What types of account do you have on your file that are settled? credit cards? loans? payday loans? catalogues? phone contracts? overdrafts?
how long was the longest one held for?

When you say this is holding you back - have you appled for something any been declined? if so what?

Thank you for your help. The 16 accounts are credit cards, store card, tv services, broadband, phonebill etc.

At the moment I have 2 credit cards (one main credit card with my bank halifax, one to build a good credit rating from capital one and a car loan with ford finance which i pay in full each month. I have an ongoing phonebill with o2 and virgin media tv&broadband package services. Everything gets paid up. I have overdrafts but i dont tend to use them. Is it worth lowering the amount of credit i have in my overdrafts? I have had my main credit card for over a year and 6 months. Some previous accounts (like phonebills & tv services would have been open for a year or more too).

I want my credit rating to be really great so i can get a mortgage when i am ready. i fear not being able to get a mortgage if my rating is not in good shape. I have been turned down for two 0% credit card applications and one loan from sainsburys (to which they would not tell me why, i just didn't meet their own policy terms to be accepted). I waited between applications more than 6 months as advised. I wanted a 0% on purchases card to pay off my car loan and then save money in a savings account before i need to pay it off to kickstart my savings.

I think perhaps a second job may help as i would earn more. I earn over 20k a year.

Tixy

It sounds like you are on your way to building up a reasonable credit history. The thing with a credit history is it does take time to build up, but you seem to be going the right way about it.

Keep paying everything on time. I doubt it makes much difference to reduce the limits on your overdraft at the moment but try to not use the overdraft regularly. By the time you are ready to get a mortgage (presumably its not right now) I guess you will have paid off your debt and your accounts will have been that bit longer.

Incidentally - A 0% on purchases card is unlikely to have been any use to pay off your car loan - as you would not be making a purchase, but paying off existing debt. You'd have needed to consider getting a 0% balance transfer card that allows you to do money transfers - and then put transfer into your current account and used that to pay off your car loan.

A second job earning more would presumably allow you to build up yoru deposit quicker and might allow you to borrow more on a mortgage, but it won't directly improve your credit rating.

luckylouise08

Tixy wrote: »

It sounds like you are on your way to building up a reasonable credit history. The thing with a credit history is it does take time to build up, but you seem to be going the right way about it.

Keep paying everything on time. I doubt it makes much difference to reduce the limits on your overdraft at the moment but try to not use the overdraft regularly. By the time you are ready to get a mortgage (presumably its not right now) I guess you will have paid off your debt and your accounts will have been that bit longer.

Incidentally - A 0% on purchases card is unlikely to have been any use to pay off your car loan - as you would not be making a purchase, but paying off existing debt. You'd have needed to consider getting a 0% balance transfer card that allows you to do money transfers - and then put transfer into your current account and used that to pay off your car loan.

A second job earning more would presumably allow you to build up yoru deposit quicker and might allow you to borrow more on a mortgage, but it won't directly improve your credit rating.

Thank you again. I guess I got confused with the 0% purchase or balance transfer. It's easy to get confused with finance!

I want to pay my car loan off quicker than the deadline which is a 4 year loan. I'm a year and a 5 months into it. If I asked the company to take higher payments each month than I already pay and settle the loan quicker than the deadline, would this cause a negative impact on my credit rating?

Tixy

It won't have a negative impact on your credit file. But you'd need to check if they allow overpayments, and if so how you can make them (you may have to make them manually on top of your normal DD payment).

Hooloovoo

luckylouise08 wrote: »

I want to pay my car loan off quicker than the deadline which is a 4 year loan. I'm a year and a 5 months into it. If I asked the company to take higher payments each month than I already pay and settle the loan quicker than the deadline, would this cause a negative impact on my credit rating?

I would check if it makes sense to do that.

Car loans don't usually work like normal loans and mortgages. They work out how much interest you owe on day one, and then just divide that out over the course of the loan. ie the interest is fixed and doesn't decrease with each payment as it does with a mortgage.

Paying it off early may not save you any money at all.

CLAPTON

what sort of car loan? HP or is it just a personal loan
how much is it?

stop using the overdraft facilities

as far as the mortgage is concerned the important things are
your income
your deposit
no bad marks on the credit files
existing debts may effect the amount they will lend as it will affect the affordability of the mortgage payments