Totally confused about my credit rating!

Ellen1982

I use this site quite frequently for research purposes but am a first-time user of the forums, so please be gentle.

I just checked my credit report on Noddle and am increasingly confused about why it's so bad. According to Noddle, I currently have a score of 2/5, which I perceive to be quite poor. However, I see no reason why this is the case. I only have one credit card with currently around £1700 on it, which we pay off monthly at around 10% of the total balance every month. I have no other credit cards or overdrafts and haven't had for several years. The last bad debt I had was a phone bill that I didn't pay, as I wanted to cancel and they wanted me to pay an additional early cancellation fee. This was for an amount of £50 or something and I did eventually pay it within 6 months. This incident took place around 3-4 years ago and since then I have had no bad debt, no CCJs, not even one missed payment.

I am self-employed and I know that doesn't always reflect well on your credit rating, but nothing I can do about that and I do earn a regular living. Other than that, I have been trying to get on the electoral roll. I've just been on to our council about that, because apparently they didn't get the form through which I sent them, but hopefully this will get sorted now in the next few days and should be updated on my record soon. Other advice I have read is to make sure all bills, bank accounts etc. are on the same address and this has also been done.

So, to cut a long story short, I'm stumped as to why I still have such a poor mark! The reason for my concern is that my husband and I (he has an even worse rating than I do, but we have no joint finances) would like to eventually buy property and get a mortgage. Not in the immediate future but hopefully in around 3-4 years' time. So I'm trying to get at least MY credit rating up to scratch before it is practically necessary. But all the improvements I try to make just seem to make things worse! Last time I checked Noddle, I was on 3/5, now 2/5 whereas nothing has changed in my finances or financial position and I did not apply for any new credit in the past few months. Help?

Justicia

Ellen1982 wrote: »

I use this site quite frequently for research purposes but am a first-time user of the forums, so please be gentle.

Your research clearly didn't extend to this particular sub-forum, Ellen

The numbers or fractions on display mean very little when applying for credit

If you do a search on credit ratings/scores or read some very recent threads here, you will see a recurring theme in response to a common question such as yours.



P.S. I was gentle

downhillfast

Ellen1982 wrote: »

I use this site quite frequently for research purposes but am a first-time user of the forums, so please be gentle.

I just checked my credit report on Noddle and am increasingly confused about why it's so bad. According to Noddle, I currently have a score of 2/5, which I perceive to be quite poor. However, I see no reason why this is the case. I only have one credit card with currently around £1700 on it, which we pay off monthly at around 10% of the total balance every month. I have no other credit cards or overdrafts and haven't had for several years. The last bad debt I had was a phone bill that I didn't pay, as I wanted to cancel and they wanted me to pay an additional early cancellation fee. This was for an amount of £50 or something and I did eventually pay it within 6 months. This incident took place around 3-4 years ago and since then I have had no bad debt, no CCJs, not even one missed payment.

I am self-employed and I know that doesn't always reflect well on your credit rating, but nothing I can do about that and I do earn a regular living. Other than that, I have been trying to get on the electoral roll. I've just been on to our council about that, because apparently they didn't get the form through which I sent them, but hopefully this will get sorted now in the next few days and should be updated on my record soon. Other advice I have read is to make sure all bills, bank accounts etc. are on the same address and this has also been done.

So, to cut a long story short, I'm stumped as to why I still have such a poor mark! The reason for my concern is that my husband and I (he has an even worse rating than I do, but we have no joint finances) would like to eventually buy property and get a mortgage. Not in the immediate future but hopefully in around 3-4 years' time. So I'm trying to get at least MY credit rating up to scratch before it is practically necessary. But all the improvements I try to make just seem to make things worse! Last time I checked Noddle, I was on 3/5, now 2/5 whereas nothing has changed in my finances or financial position and I did not apply for any new credit in the past few months. Help?

The items in red are why you are perceived to be a bad credit risk at the moment.

- limited lines of credit in use do not allow potential lenders to see a history of good account management

- A late payment 3-4 years ago is still visible to potential lenders (things stay on record for 6 years)

- You are not CURRENTLY on the electoral roll - this will make a big difference once the local council update their records.

Ellen1982

Hi guys and thanks for the advice! Sorry about the late reply - I forgot to subscribe to the email notifications so had no idea anyone had replied until I checked.

Since last week, I received another form from the council to get onto the electoral roll, so I have filled it out again and will send it this week for take 2. See if they can get my details on the system correctly now.

So, Downhillfast, you don't think being self-employed has that much of an impact? Would be good if it doesn't, as this is obviously not something I can currently change or do anything about. Taking out another credit card/loan etc. to build up good credit is also not an option, even if I wanted to, as I'm currently getting rejected for every form of credit I apply for. I tried a cc a few months ago to do a balance transfer (rejected) and just today I tried a bank loan so my husband and I (whose credit is even worse than mine) could buy a decent secondhand car. At the moment we are forced to buy a 'new' old banger every year, which starts breaking down after less than a year and is not exactly safe for our new baby due in a few weeks' time! Surprise, surprise, I was rejected for the loan as well.

Guess I'll have to hope for the best with the electoral roll, as there doesn't seem to be any other way for me to get out of this credit situation at the moment...other than time... :mad:

Gordon_Hose

downhillfast wrote: »

The items in red are why you are perceived to be a bad credit risk at the moment.

- limited lines of credit in use do not allow potential lenders to see a history of good account management

- A late payment 3-4 years ago is still visible to potential lenders (things stay on record for 6 years)

- You are not CURRENTLY on the electoral roll - this will make a big difference once the local council update their records.

I'm not currently on the ER and Noddle give me "5/5" lol Can't see this being the issue.

Late payment/default still visible is more likely the issue here.

Ellen1982

Thanks, Gordon! Just had another look and it's the only bad mark on what otherwise looks like a decent report to me. Another 2.5 years to wait then until it gets removed!

downhillfast

Gordon_Hose wrote: »

I'm not currently on the ER and Noddle give me "5/5" lol Can't see this being the issue.

The 'score' Noddle give you is worthless... the report the potential lender will see will show you not to be on the electoral roll and that IS something lenders care about - if you're not on the ER then it doesn't exactly show your abode as being particularly permanent and the possibility of you doing a runner and not paying the credit back, much higher!

downhillfast

Ellen1982 wrote: »

So, Downhillfast, you don't think being self-employed has that much of an impact?

I never said that! lol I just didn't mention it as being a definite reason for you being a bad credit risk at the moment... it will be a factor... but just how much ???

Ellen1982 wrote: »

Taking out another credit card/loan etc. to build up good credit is also not an option, even if I wanted to, as I'm currently getting rejected for every form of credit I apply for. I tried a cc a few months ago to do a balance transfer (rejected) and just today I tried a bank loan

Whoah!!!! Stop applying for credit whilst you know your credit file doesn't show you in a favourable light!

Was the credit card you applied for aimed at people with bad credit rating or a did it have an amazing APR? If the latter then it is no real surprise that you were declined. Same thing for the loan - high street lender with decent APRs will not touch high risk customers generally - and that's what your CRA files say about you at the moment unfortunately.

Having repeated credit checks on file with no new accounts showing is a sure fire way to tell future lenders that no one else will touch you with a bargepole.

Sit tight and get your electoral roll issue sorted.

Gold_bullion

It makes me laugh the way the CRA's ratings are always dismissed on here as the standard thing to slag off. The truth is that they are generally a pretty good guide i.e. low score = no credit as the poster has experienced. There's always someone who claims to be the exception of course, but it is GENERALLY true that good credit risks get higher scores and poor risks lower scores.

Not being on the electoral roll will be a big factor, as will not having had very many lines of credit - most people have several of these, even if they are current account with small overdraft facility, mobile phone and a credit card with low limit.

Have you tried to have the bad credit mark removed? If you think it is inaccurate, write to the company the default was with, stating your case and asking them to remove it. If there is doubt they may do this to avoid a costly series of exchanges for which there is nothing in it for them.

As DHF says, don't apply for more credit until you get a better rating, otherwise it's a vicious circle. As I've pointed out on here before, the CRA's ratings DO matter, because the lenders generally follow the same scoring methods, and so it gives you a good idea of how the lenders themselves will probably be scoring you.

Eonel

Gold_bullion wrote: »

It makes me laugh the way the CRA's ratings are always dismissed on here as the standard thing to slag off. The truth is that they are generally a pretty good guide i.e. low score = no credit as the poster has experienced. There's always someone who claims to be the exception of course, but it is GENERALLY true that good credit risks get higher scores and poor risks lower scores.

......

As I've pointed out on here before, the CRA's ratings DO matter, because the lenders generally follow the same scoring methods, and so it gives you a good idea of how the lenders themselves will probably be scoring you.

CRAs scores are fundamentally flawed because they only look at half the picture - your debt and not your income. £1,700 credit card balance on JSA is a lot. £1,700 credit card balance on £100,000 income is not.

I have no problem with a CRA calculating their view of my credit worthiness in the form of a score. But to charge people money for a score that no bank would use because it is only half of the picture is a rip off.

BugsyBrowne

Gold_bullion wrote: »

It makes me laugh the way the CRA's ratings are always dismissed on here as the standard thing to slag off. The truth is that they are generally a pretty good guide i.e. low score = no credit as the poster has experienced. There's always someone who claims to be the exception of course, but it is GENERALLY true that good credit risks get higher scores and poor risks lower scores.

Not being on the electoral roll will be a big factor, as will not having had very many lines of credit - most people have several of these, even if they are current account with small overdraft facility, mobile phone and a credit card with low limit.

Have you tried to have the bad credit mark removed? If you think it is inaccurate, write to the company the default was with, stating your case and asking them to remove it. If there is doubt they may do this to avoid a costly series of exchanges for which there is nothing in it for them.

As DHF says, don't apply for more credit until you get a better rating, otherwise it's a vicious circle. As I've pointed out on here before, the CRA's ratings DO matter, because the lenders generally follow the same scoring methods, and so it gives you a good idea of how the lenders themselves will probably be scoring you.

Morning James Jones trying different tactics to sell your scores I see.