Cash plus credit rating minor issue - help?

kellsm

Hi guys!

Quick bit of background - honest background. I am trying to improve my credit rating after years of abuse and simply not caring when I was young. (From 20-28 I was particularly bad) I didn't really understand. I've recently paid off all my debt (was never particularly high, i recently had a Payrise which has let me clear it all) Despite still having "satisfied" defaults on my account I am now making an attempt to improve things.

I still have my capital one credit card running that I hadn't used since I got in trouble. Hoping the monthly payments I will make on this will help. Although I'm not sure how long it will take to impact my rating.

Anyway - my question is, my experian credit report had me as only 30 points from having a "fair" credit rating. I was fairly pleased with this as in the past I did have a bad time of it.

I opened a cash plus account with credit builder - am making my payments fine. They've just added this to my credit report and it's dropped my report by 40 points!! I know this may be due to it lowering my average age of my accounts but is this going to be permanent until it's finished now? I was so close to fair!
Sorry if this sounds silly. I'm just learning and am new to all this and I'm trying to find out how things work. I'll be reading the forum all night

Thanks guys x

boo_star

Simple answer: CRA "scores" are meaningless.

Longer answer: Taking out any new credit agreement will lower your "score" temporarily, be it a new phone contract, CC or loan.

I personally think you've wasted your money getting the Cashbuilder card, you already have a CC which is likely to do far more to improve your creditworthiness to lenders than a "fake" loan ever could.

In short, don't obsess over the guff that the CRAs feed you, just carry on as usual.

kellsm

Thanks for replying. Glad this is temporary. I am a bit of an obsessive person.

I didn't actually realise my credit account was still there when I took out the credit builder thing. Do regret it a bit now but it's done now I guess. I'll just carry on using a paying off my cc and hope I will go up a bit soon

I eventually want to be in a position to get a mortgage, but I'm aware this will be really hard while I still have defaults, although paid in full. no matter how well I manage my finances

Thanks again x

kellsm

I've just noticed my newbie alert. That's made me laugh I like that

boo_star

Once those defaults drop off you should have a clean repayment history so getting a mortgage shouldn't be out of the question.

Thrugelmir

Focus on clearing your existing debts. Then concentrate on saving a good deposit. As it's this which will make obtaining a mortgage easier.

Make sure you stay registered on the electoral roll every year as well.

kellsm

Thanks for all the replies. Unfortunately the last won't drop off until 2017 so I'm a bit screwed for a while oh well at least they're paid.