Credit Rating: Very Poor.

lagerbreath

Hi all,

I've never really worried about my credit report, I suppose that's part of being young and care free.

But, now I have come to realise that doing the above has/will now have a serious impact on my life.

I have recently received a sum of money which I have paid off all debt with which I personally didn't believe was much £400 with Santander with who I set-up an agreement with but failed to complete though this is now finished. And I regularly missed the odd payment on other accounts such as Very.co.uk and my mobile contract.

This all seems to have completely messed up my rating which is now 506 (Very poor) provided by Experian and I wish to improve this in order to apply for a mortgage.

Here are my report details:
506 points
2 Positive Factors: Balance of your unsecured lending indicates a lower risk, No recent searches on your credit report.
3 Negative Factors: Account regarded as defaulted or delinquent (Santander), Recent missed payments on your credit report (Mobile and Very), The age of your accounts indicates lenders are likely to view you as higher risk.

I also have two unused current accounts which are Santander and NatWest. Would you suggest closing these down? They are accounts which were opened within the past year which I have no use for now.

I suppose the over-all question is... What can I do to improve my rating as I am willing to do practically everything it takes?

I have considered the credit cards used for building credit though I fear the likelyhood is I will not be accepted and do not what that appearing on my report. Would opting for a pre-pay card be my best option here?

Cheers and Kind Regards,
Lagerbreath

[Deleted User]

Try one of the sub prime cards - aqua, vanquis etc. But only if you think you can manage not to miss payments. If you don't think you can, then it would be better to have no credit agreements than badly managed ones.

grumbler

lagerbreath wrote: »

...I suppose that's part of being young and care free.

No, it is not. Many young people do care.

I also have two unused current accounts which are Santander and NatWest. Would you suggest closing these down? They are accounts which were opened within the past year which I have no use for now.

I think they can do no harm.

Would opting for a pre-pay card be my best option here?

No. Prepaid cards are not reported except Cashplus Creditbuilder that IMO is aimed to people in a worse position than you. You can try some other Bad-credit Credit Cards though. Only the credit searches are recorded in your files, rejections are not: Credit Ratings

lagerbreath

It looks like my best option is the Credit Building pre-paid card. Thanks for any advice!

pompeyred

No, your best bet is not further credit. If you still have those other accounts - hang on to them, a well serviced account is good, even if it had a jaded past, the longer you keep it the better it looks.

Close down anything you dont use which doesnt offer you any credit facilities. If you arent going to use it - get rid.

You're in a much better place than most that realise credit is an easy mess to get into, you've seen that it's important and it truly is, pay the payments on time and you'll come to get the rewards that go with it.

dealer_wins

Why do you need credit. Start saving up for emergencies/rainy days, and for a possible mortgage deposit. Learn to live on 75% of your net income.

It will save you £1000s & £1000s of interest compared to your average joe who borrows throughout their lifetime!!

matttye

Does anybody know if you actually need to use the Cash Plus credit card for it to work? Mainly interested in the credit builder part. I.e. can I just pay the £4.95 per month and not actually use the card?

I wonder how many lenders have caught on and don't pay much attention to the Cash Plus repaid loan too.

Not interested in borrowing money (prefer to save) other than for a mortgage, and for that I think my creditworthiness needs some significant work!

jonesMUFCforever

matttye wrote: »

Does anybody know if you actually need to use the Cash Plus credit card for it to work? Mainly interested in the credit builder part. I.e. can I just pay the £4.95 per month and not actually use the card?

I wonder how many lenders have caught on and don't pay much attention to the Cash Plus repaid loan too.

Not interested in borrowing money (prefer to save) other than for a mortgage, and for that I think my creditworthiness needs some significant work!

Please don't take this the wrong way but if you are prepared to waste £60 per year over this then you know why your credit rating is poor.

To improve your credit rating - pay off any defaults ASAP and continue to pay everything else off on TIME.
Don't pay for a credit card - if you have a mobile on contract - make sure you pay it every month on time without fail - the same for your catalogue.

There is no magic wand here - you need to put some positive ticks on your reports for 6 months and more then things will start to improve.

matttye

jonesMUFCforever wrote: »

Please don't take this the wrong way but if you are prepared to waste £60 per year over this then you know why your credit rating is poor.

To improve your credit rating - pay off any defaults ASAP and continue to pay everything else off on TIME.
Don't pay for a credit card - if you have a mobile on contract - make sure you pay it every month on time without fail - the same for your catalogue.

There is no magic wand here - you need to put some positive ticks on your reports for 6 months and more then things will start to improve.

My credit rating is poor because of mistakes I made four years ago. I have two defaults on file. Paid both debts off in full back in 2009 along with another debt I dealt with before it got to the default stage. I also have late payment markers with Halifax, which I am disputing - details of which I posted here: https://forums.moneysavingexpert.com/discussion/4508387

I've had a bank account with Lloyds TSB since March 2009 and have had overdrafts ranging from £100 - £1,500 in varying amounts throughout this time and my account has been kept up to date the entire time. No missed payments, defaults etc.

I had a pay monthly contract with Orange from May 2010 to November 2011 and never missed a payment. Paid it off early so I could take out a new contract.

I had a pay monthly contract with O2 from September 2011 to November 2012 and never missed a payment. Paid it off early so I could take out a new contract.

I had a pay monthly rolling contract with Three for a data-only SIM for an iPad from December 2011 to January 2013 and never missed a payment. Cancelled this in January as I got an iPhone and decided I didn't need to use my iPad when I'm out and about; only on WiFi.

Finally, I've had a pay monthly contract with O2 from September 2012 to present and, again, never missed a payment.

I still can't open a damn current account with Nationwide.

I'm guessing the problem with my report is the missed payment markers from Halifax, which I will fight in court if it comes to that, because I've kept plenty of accounts up to date since I settled my past debts.

I've written to O2 (who applied one of my defaults) to politely request they consider removing my 2009 default early on the basis that I've kept multiple accounts up to date with them since and I was 20 at the time of my default and now nearly 25. I don't think they will actually do this but it's worth a shot. :rotfl:

I'm a gadget freak hence why I've had so many contracts and devices, but I've only ever bought what I can afford. I've never borrowed money to buy them. Trying to curb this expensive hobby now as I need to save for a mortgage deposit.

The time that my overdraft reached £1,500 was when I bought my first car for £900 (which added to an existing £600 overdraft). That's the last time I borrowed money that I couldn't pay back in full every month (overdrafts) and I paid that back quickly.

Paid off my overdraft with Lloyds using savings and cancelled it altogether as I don't intend to use it again.

jonesMUFCforever

Defaults from 4 years ago will still show on your credit files - so 2 more years to go until they are clean.

matttye

jonesMUFCforever wrote: »

Defaults from 4 years ago will still show on your credit files - so 2 more years to go until they are clean.

Are defaults from four years ago likely to stop me getting a current account when I've ran every other form of credit perfectly though?

I think the late payment markers from Halifax are probably viewed more negative than the defaults, given that they are current. My report looks like I have a year and a half old debt with no efforts made to pay. I wonder why Halifax haven't sent me a default notice on that anyway?!

I paid what I owed on an overdraft + the interest that would accrue that month and I was promised no more interest would accrue. £1.26 interest accrued the following month and I simply wasn't aware of it due to what I'd been told.

Even if I was aware of the £1.26 interest, I've never been asked to repay the overdraft, so I can't have been late paying it back.

Think I've got a fair shot of having them removed, just waiting for a response to the letter I sent on 21/03/13.