Poor credit score how do i improve it!?

Moopheus

Hi guys,

ok I have a "credit score" of 533 according to Credit Expert I used the little trick on this site to get a free credit check, now I'm fully aware that this score isn't actually real and all lenders view people differently but what it does do is give me a good little insight into what lenders view when considering me for a loan etc

Now having looked at my account I have 2 defaults on it, these are both failed mobile phone contracts, they defaulted because my Mums business fell under and went bankrupt, meaning I lost my job and so did she I had 2 phone contracts 1 for her and 1 for me but both in my name.

Like I said 1 has been fully paid off and appears as Satisfied on my account, and I'm working on paying off the other contract with Monthly re-payments.

Apart from that I don't seem to have anything else on there.

Now about myself

I'm 22
Serving in the British Army (for about 1 year 6 Months)
I'm married
My wife has decent credit rating
We also have a military home so I guess you could say Private Tenant furnished
I earn a decent wage after paying rent and everything else I still have about £1,000 a Month left over.

Now I want a new Car as I have some old one that I keep having to spend loads of money on to repair, but I can't get finance on one because of these default accounts, I also want to get a mortgage in the future using Car finance to boost my credit report for this ideally.

But even if I paid my default account would it even make a difference or would I still be "marked" or w/e you call it?

An what can I do while I'm working on paying off my default account to boost my credit rating in the mean time.

I've applied for a Credit Card with Aquis as suggested from this site and I'm awaiting a phone call, apparently I can slowly build my credit file with this Card, is there anything else I can do?

Thanks for reading

The_Boss

If you repay the default it is marked as "satisfied" on your reports which is a slightly better situation. Although still very negative though.

Moopheus

ok then so how do I improve my rating? I can't think of any way of which I can do this if nobody will even give me a chance.

Surely I'm not doomed to have a poor score forever?

sulphate

How long ago were these defaults? It's my understanding that defaults "fall off" credit reports after 6 years.

optimist68

Yes, demonstrate using another credit account that you can in fact manage credit well, that you can keep the balance to below 10% of the available credit and you never miss a payment. Don't rely on minimum payments either, as they are flagged up.
The defaults will soon become less significant over time and your score will go up. I know this as I am helping a friend who has two defaulted accounts and with all the other things I'm doing to help, his account has moved from Poor to Fair - even with those two accounts, one still recording a default - until the debt is fully paid off.
Here's my advice (there'll be more): keep to one mobile phone account/contract for a while, manage it well, don't miss any payments on any bill or other account, especially any that show up on your credit files, don't apply for any further finance yet. Getting refused will worsen your situation and it'll add a search to your file.
Depending upon your plans, it could take some time to fix your report so that it's suitable for a mortgage application.
As for the car finance, yes this might help, as long as you don't miss payments. But, it will also take from what you might be classed as being able to afford when it comes to applying for a mortgage, which is no bad thing as a car is something most of us tend to rely on nowadays. So, best take a mortgage out with that cost born in mind.
Hope it helps. I'm no expert, but have fixed mine and a few people's credit reports over the years.

optimist68

Moopheus wrote: »

ok then so how do I improve my rating? I can't think of any way of which I can do this if nobody will even give me a chance.

Surely I'm not doomed to have a poor score forever?

You're definitely not doomed! Don't worry. Just have a realistic strategy and stick with it. It'll take no more than 6 years, I guess much less. But, you need to keep things going well in the meantime.
Also, as I suggest to others, sort out a spreadsheet of your finances: net income/all outgoings and ensure that each month you would have more than enough to pay for a mortgage at say, 7%. So where you pay x amount in rent, change it to what a mortgage at 7% would cost - does it leave you with enough to live off? Do that sort of thing. You'll be asked to give all of this info. I spent two years tweaking and fine tuning everything before I applied. Thing is, it's not just the bank who should be confident you will be able to afford your life, it's you and your wife, so well worth getting it all properly sorted out and under control, and being able to demonstrate that you've been doing this for some time.

Moopheus

ok the first default that I'm still paying off is dated:

19/03/2011 (£838 remaining)

The second being

07/07/2011 (Fully paid off - Satisfactory)

ok now hopefully I get accepted for this Credit Card, I'll probably use it to pay for my TV licence monthly and then nothing else, this should be small enough payments to help increase my rating.

I also have a £1250 student overdraft with my current account which has 0 interest rates etc, this seems to have been leaving positive marks on my credit account.

So apart from paying off the default account and this credit card is there anything else I can do?

My bank address is at the same address as my electoral role I was told this helps.

P.S Payday loans now do they negatively effect you? I've had a few in the past not for significant amounts and I've always paid them early never missing any payments.

optimist68

Moopheus wrote: »

ok the first default that I'm still paying off is dated:

19/03/2011 (£838 remaining)

The second being

07/07/2011 (Fully paid off - Satisfactory)

ok now hopefully I get accepted for this Credit Card, I'll probably use it to pay for my TV licence monthly and then nothing else, this should be small enough payments to help increase my rating.

I also have a £1250 student overdraft with my current account which has 0 interest rates etc, this seems to have been leaving positive marks on my credit account.

So apart from paying off the default account and this credit card is there anything else I can do?

My bank address is at the same address as my electoral role I was told this helps.

P.S Payday loans now do they negatively effect you? I've had a few in the past not for significant amounts and I've always paid them early never missing any payments.

Yes, 'hard close' accounts you no longer want. Here's a template I found and have used:

---

Your Name
Your Address
Date:

Closure of Account: account details

I am writing to request that you process a “hard close” of my credit account. The account/card number is: nnnn. The card is in the name of xxxx.

I wish to ensure that no new charges can go through after the account has been closed and that I am not faced with charges, i.e. new monthly charges, in the future.

Please can you also report to the credit reporting agencies that the account was “closed by consumer request” and send me written confirmation that the account has been closed at my request.

---

Moopheus

optimist68 wrote: »

Yes, 'hard close' accounts you no longer want. Here's a template I found and have used:

---

Your Name
Your Address
Date:

Closure of Account: account details

I am writing to request that you process a “hard close” of my credit account. The account/card number is: nnnn. The card is in the name of xxxx.

I wish to ensure that no new charges can go through after the account has been closed and that I am not faced with charges, i.e. new monthly charges, in the future.

Please can you also report to the credit reporting agencies that the account was “closed by consumer request” and send me written confirmation that the account has been closed at my request.

---

Wow! that's brilliant I'll get straight onto this thanks!

DCFC79

Yes of course pay day loans affect your credit rating and in a bad way. They show you can't budget properly.

Moopheus

DCFC79 wrote: »

Yes of course pay day loans affect your credit rating and in a bad way. They show you can't budget properly.

I wouldn't need to get them if I was allowed a Credit Card, it's only ever been for the odd £10 or £20 when I've found myself short, that's disappointing though I thought credit was credit and providing I paid it off on time or early it couldn't harm me.