Improving credit file - the best thing to do?

dave88uk

I got hold of my credit file as I'm applying for a mortgage to move house soon and safe to say ... it needed some help!

The original score was 540, the negative factors were:

:- 2 Defaults - 1 from T-Mobile and 1 from Lowell Portfolio who bought the debt. Lowell have since removed their default and I'm fairly confident T-Mobile will remove theirs.

:- 2 late payments on a HP agreement. This was an agreed delay, I complained and they have both been removed showing the account as Satisfactory.

:- The value of your highest credit indicates a higher risk

:- You have recently opened one or more new accounts (nothing I can do about this now!)

So, I've addressed the default/late payments issue. With regards to the highest credit limit I'm a bit stuck on what to do.

I have a credit card (cashback card) that I use, I lowered the credit limit to £1,000 when I lost my job to ensure I wouldn't do bad things etc...

I could apply for a higher limit ... but don't want to risk an unnecessary search.

I also have another credit card I haven't used for years, it's got a £100 limit (originally around £1,800 I think but I reduced it when I took another credit card).

I now have a score of 840 which still shows as fair. The last default was 2010 and since then my credit file shows as everything paid..

So, whats the best thing to do? Apply for a credit increase, close the dormant credit card?

I'm very keen to get my credit score into the good section, I know that until the default is removed either by TMobile or at 6 years then I won't be able to go too much higher.

At the moment thats all I can think off, all details are correct, I'm on the electoral roll etc, no signs of fraud. If someone else can recommend something I haven't thought of I'd be very grateful.

Ah, I meant to mention. Recently the wife got a credit card in her name for £3,000 (it's a 0% card), were going to use the money transfer on that to put towards the £6,900 remaining on the HP loan. We're also expecting some money coming in, £1k from a delayed flight, £2k worth of loans to a friend .. so hopefully that loan will be gone shortly!

thebritishbloke

I wouldn't bother applying for a credit limit increase, it'll just put another search on your record.

I'd close any unused accounts, I wouldn't say a £1000 limit is high by any means, I have £5000 in credit card limits and I'm only 20. I'm sure there's a lot of people on here with 10x that.

Perfect, just remember to pay off your most expensive debt first, then focus on hammering down the 0%

The_Boss

You don't have a credit score. You're referring to a pointless meaningless number as emphasised by the fact you have defaults and a 'score' classed as 'fair' when the majority of lenders will likely be scared stiff of you.

To improve your credit worthiness always ensure you make at least the minimum payment on your cards. If you only have two cards then keep both as it will mean two lots of positive data recorded each month as long as you do pay at least the minimum by the due date. Personally I'd see if the £100 could be increased to £1k and the £1k to £2k, but not sure on your chances of success with such ropey past form.

Other than that you need to be patient and wait for the defaults to drop off, otherwise lenders will generally and correctly penalise you for past financial irresponsibility.

dave88uk

The_Boss wrote: »

Other than that you need to be patient and wait for the defaults to drop off, otherwise lenders will generally and correctly penalise you for past financial irresponsibility.

Bit harsh, I hope you don't jump into rivers like you just into assumptions - it could lead to a nasty injury ...

The reason I'm having my defaults removed as they were down to ID fraud, I've proven that and creditors are thus happy to remove.

The late payments were an agreement between me and the creditor where I was assured those marks wouldn't be made .. hence their removal.

Anyway, I've now got 2 x 0% credit cards that will shift my last remaining debt (interest chargable) - thus I'm interest debt free (except current mortgage of course)

Now .. where's that new mortgage application

Thrugelmir

dave88uk wrote: »

Anyway, I've now got 2 x 0% credit cards that will shift my last remaining debt (interest chargable) - thus I'm interest debt free (except current mortgage of course)

0% cards won't do you any favours. As it's the debt that matters.

The_Boss

dave88uk wrote: »

Bit harsh, I hope you don't jump into rivers like you just into assumptions - it could lead to a nasty injury ...

The reason I'm having my defaults removed as they were down to ID fraud, I've proven that and creditors are thus happy to remove.

The late payments were an agreement between me and the creditor where I was assured those marks wouldn't be made .. hence their removal.

Anyway, I've now got 2 x 0% credit cards that will shift my last remaining debt (interest chargable) - thus I'm interest debt free (except current mortgage of course)

Now .. where's that new mortgage application

Fair enough, I'll take this one on the chin - sorry.

dave88uk

The_Boss wrote: »

Fair enough, I'll take this one on the chin - sorry.

Cheers, Boss! We're all guilty of it at some point :beer:

Regarding the 0% debt comment above, a valid point that a debt is a debt. But, apart from a very small debt, there isn't a better debt than a 0% debt. Especially when a £189/month repayment turns into a £65/month repayment. Already diary'd for 2 years time to renew credit cards.

fuisdale5

My score was relatively high and never had a problem apply for finance.

I bought a house and spent monies on my credit card doing it up and low behold my score is very poor.

I know the reason for spending the monies as a new home owner. Spoke to experian as a member and they said your low score was your using too much credit. 6 months time and reducing the balance will improve your score.

That made sense.

The_Boss

fuisdale5 wrote: »

My score was relatively high and never had a problem apply for finance.

I bought a house and spent monies on my credit card doing it up and low behold my score is very poor.

I know the reason for spending the monies as a new home owner. Spoke to experian as a member and they said your low score was your using too much credit. 6 months time and reducing the balance will improve your score.

That made sense.

Please see the second response to this thread (and also my signature).

dave88uk

The Boss, I'm going to start a seperate thread in a minute that should probably be your ideal subject to comment on.