Will having my current account on my credit report improve my credit rating?

Cleanstart_2

I'm trying to improve my credit rating...

I have a CCJ which will drop off my file in two months and an unsettled default that will drop off my file in 12 months. Both combined are less than £600

I have two 12 month loans (£1000) and a credit card (£750 limit) taken out about 10 months ago in an attempt to give me a better credit rating. Both are clean and have been paid every month without fail. So I'm hoping when the CCJ and default drop of my file, I should have a reasonable credit history and decent credit rating.

I do also have an overdraft of £3000 on my current account which I'm currently not using (my account balance is in the black). However this does not show on my credit reports as it was opened in the years before banks started using them.

My CreditExpert credit report summary says "The value of your highest credit limit indicates a higher risk." So I'm assuming that having the £3000 overdraft on my credit file would be of benefit to me.

I've also heard that banks will often agree to share their data with the credit reference agencies if asked to do so. If I were to do this with my £3000 limit then this would be favourable to me, is that right?

However, I have gone over my overdraft in the past. Which would look bad. Does anyone know if the bank would share previous history and balances or if they'd only share account status from the present day onward?

The_Boss

First up you don't have a credit rating - they don't exist.

Secondly - take the Experian suggestions with a huge pinch of salt - they are trying to justify their existence.

Bank accounts are reported on credit files, but not the balance UNLESS you are in overdraft. Lenders will see the overdraft limit and how much is being used (if applicable) and will factor this in when they score future credit applications you make.

In your case (similar to mine) you have an account that is not reported on your credit file due to age, so lenders will not see that extra £3k as available credit to you, nor the use of it in the past - which will be a benefit to you (although the lender who it is with may be able to access this data internally). However, you may still need to declare it in the application part of a credit agreement.

Out of interest, when did you open this bank account?

Cleanstart_2

Opened in 1996

As I understand it, lenders look at the maximum amount of credit available to you. They won't see this as it's not reported to the credit reference agencies. I understand that I can request for my bank to share my overdraft usage information with the agencies.

If I do request this, will they share my entire history of that account going back the past 6 years or will they only share the current information and the account status monthly from now on?

Thrugelmir

Cleanstart wrote: »

As I understand it, lenders look at the maximum amount of credit available to you.

Indeed they do. But for the purposes of evaluating how much to offer you. There's no brownie points for what you already have.

What's your aim?

Cleanstart_2

Thrugelmir wrote: »

Indeed they do. But for the purposes of evaluating how much to offer you. There's no brownie points for what you already have.

What's your aim?

My short term aim: To get a better credit card, either one with a high limit or one with cashback/airmiles/tesco points. Long term, I want to be able to apply for a mortgage.

At the moment I have a single card with £750 limit. Each month I use it up to the limit (keeping the 750 earning interest in a savings account) and pay it off each month.

At the moment, it says I'm using a high amount of my available credit (100% by the looks of my credit record. If I had my overdraft on there which I don't use anymore, it show me as using 20% of my available credit)

Tixy

The key thing will be waiting for the CCJ and default to drop off.

Don't pay too much attention to the indicators that experian highlight to you. But if you wanted to err on the cautious side of how a potential lender may judge your credit usage then I would suggest you don't max out your current card each month, but keep the spending on it to around half the limit.

Cleanstart_2

I have only recently discovered both the CCJ and the default. The CCJ is definitely invalid and I would have it set aside if it wasn't about to drop off. I'm looking into the default (I'm pretty sure it has nothing to do with me but need to get the facts from the company concerned to be sure), but again I fully expect it to be removed within the next few months.

Am I right in thinking that the best way to look good in lenders' eyes is to have lots of credit available to me but with no late payments?

Surely having that £3,000 overdraft would look better than my £750 credit card? Wouldn't it help me get a higher limit card, or one with cashback.

I'm also interested in opening up one of those Santander 1-2-3 accounts as that means I could earn much more on my savings, but I don't think they'll let me have one even once the ccj and default are removed because I have such a low credit profile. I'd have thought having credit cards with higher limits would help?