Trying to lift my rating

Kua

Hi,

I currently have a rating of poor (646), according to Experian. According to my mortgage provider (and I'm sure he's right) this is simply not high enough for me to get a mortgage when I have a measly 15% deposit.

I have the following negative points according to Experian:

1. You have an account regarded as defaulted or delinquen:

This is for £24 owed to Orange because I cancelled the direct debit too early. I paid it off as soon as I saw it on my credit report. Is there any hope whatsoever of getting it cleared. Its even been suggested that you can pay to get it cleared. I would happily do that but suspect that isn't true.

2. You have revolving credit that has been open for less than 10 months.

I opened a credit card with Aqua in December. I've been spending money on it and paying it off straightaway. What is the best thing for me to do here? Close it, or wait until its been open 10 months in October?

3. The value of your highest credit limit indicates a higher risk.

Your current limits on credit and store cards show the amounts that lenders have previously entrusted you with.

"Having a low highest limit shows that lenders may view you as higher risk.
Most lenders are likely to view you more positively with a high limit."

Is the theory here that a high limit indicates I am trusted with a lot of credit? I think I may be able to increase my credit limit with Aqua. Would that be a good idea?

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The only positive point I have is the following:

"The usage of your available credit indicates a lower risk"

I used to have another positive point - you have not had any recent searches. I recently took out a rolling monthly dongle contract with 3. Before signing up I asked them whether it would affect my credit rating. They said no. But of course it has! Can I take any action to have that search removed?

Is there anything else I could do to improve my rating? In particular in the short term. I'm looking to apply for a mortgage as soon as possible.

Is it worth me trying to get an offer accepted on the house I want and applying for a mortgage in the knowledge that the mortgage providers don't neccessarily assess credit worthiness in the same way as Experian? Or would that be super foolish and further take down my credit score?

Thanks so much!

Candyapple

You won't be able to get the '3' credit search removed. One search has not affected your credit file, it's only when you have numerous searches over a short period that your 'score' will decrease slightly.

Credit scores are irrelevant, the default is what is pulling you down. You can't pay to remove a default, you could try writing to Orange and ask them as a gesture of goodwill to remove the default on the grounds that you paid as soon as you realised you owed them money. Otherwise, it will stay on your file for the next 6 years and any chance of getting a mortgage will be limited to subprime lenders.

No point in closing your Aqua card now, probably better to keep it as the longer your account has been opened, the better it will look on your file (account history wise, lenders like to see longstanding accounts).

Yes the theory is that higher limits indicate you are trusted with a lot of credit. If you apply for a credit increase, you'll need to wait a few months for it to even update and show on your file.

Why would you waste a vendor's time putting an offer in on their property without knowing that you could at least get a mortgage in principle first? Experian don't judge your credit worthiness, they only provide the data that is held on how you run your financial products. Also, if you've already seen a mortgage advisor as you said at the beginning of your post and they've told you that you have no chance, why would you waste another credit search on your file for a mortgage application knowing it would probably end in a decline?

In the short term get copies of your credit report from all 3 agencies (Experian, Equifax and Call Credit) and check that the information contained matches across the board i.e. are you showing as being on the electoral roll, any inconsistencies etc.

The_Boss

Your 'rating' (which doesn't exist) of 646 is irrelevant. And your mortgage provider can't really say whether a score is good enough as comparing an Experian score with how a lender would score you is not comparing apples with apples.

As per the previous comment, the default/delinquent account is very relevant though and if a mortgage provider knows you have that as opposed to what your worthless score is then he can accurately advise that you are too big a risk.