shot up 300 points !

andydiysaver

Hi all


A cautionary tale and some advice please!


a few years ago I wasn't as responsible as I am now, 6 years ago to be exact, where my last default was logged


Since then I've worked so hard to pay my bills , I have 20 clean accounts, always on time, every time, and I settled that default some time ago - so it's been satisfied


so now it's getting good. Hovering around in the upper 600s I've since logged in and seen callcredit shoot up to 930. that is the power of a default and when it vanishes. Equifax are slower to react but they will react this month - I never knew how disabling the default flag was, now I do.


Advice request is this. I have 5k of general debts, at poor rates once the balance transfer windows run out, and I have a 7k balance ( principal) on a loan I took out a few years back


I'm intending to get a low rate loan to consolidate all these debts, it will see me approx. 200 better off a month if the interest rate is in single figures


I can go for 5k, or I can go for 12k and wipe out the bank loan which was at 8%, so the interest rate should be lower in 8% in this scenario


How do I go about convincing a loan company - when I am likely to have a 900 credit score at all agencies, that this loan is all about debt and not more debt? is there wisdom in going for the lower tier loan?


note I'm not interested in hearing all debt is bad, it isn't - if I'm in debt, a substantially lower rate is good and saves me money - just interested in hearing from people who have been down a similar road


cheers
Andy

GingerBob_3

Andy, stand by for a blizzard of posts telling you the credit score means nothing.

Actually, it doesn't mean nothing (forgive the double negative). As you've probably worked out, it's an assessment of your credit worthiness provided by the CRAs; it's indicative of your position and as such it could act as a pointer for your future actions. All the financial institutions have their own scoring calculations which will inevitably give differing results, but to repeat, the stuff from the CRAs is indicative. Ready for the blizzard? here we gooooo ....

The_Boss

...and here's the first That number you refer to is a random made up number that doesn't exist in the real world as people do not have credit scores/ratings.

What is your salary and how much do you want to borrow? Do any late payments show on any accounts and just for clarity any defaults left on file?

DCFC79

andydiysaver wrote: »

How do I go about convincing a loan company - when I am likely to have a 900 credit score at all agencies, that this loan is all about debt and not more debt? is there wisdom in going for the lower tier loan?

Maybe if the new loan is from the lender who the current debt is with you mgit stand a chance of what you want to achieve. Lenders wont just take your word that you will pay the debts off.

andydiysaver wrote: »

note I'm not interested in hearing all debt is bad, it isn't - if I'm in debt, a substantially lower rate is good and saves me money - just interested in hearing from people who have been down a similar road

cheers
Andy

Yes it may save you money but its dependant on the criteria you have to pass to get the loan at an apr that you deem worthy enough to take the loan out.

CKhalvashi

DCFC79 wrote: »

Maybe if the new loan is from the lender who the current debt is with you mgit stand a chance of what you want to achieve. Lenders wont just take your word that you will pay the debts off.

For £8000 old borrowing + £8000 new borrowing, you need to be earning around £30k, or look at the same lender for a cheaper refinance.

It's just a guide (and by no means binding on anyone), but that seems to be the experience of many on here.

rising_from_the_ashes

Another that doesn't believe that the credit score number has anything to do with whether lenders will lend or not! They all use their own system / criteria for making decisions


Personally, I'd be much more inclined to register with one of the credit reference agencies, check what your rating is (ie hopefully 5/5 if you're wanting to apply for new credit!) and ensure that all the accounts listed are current AND all show as green and you're on the electoral roll etc

andydiysaver

thanks for all your comments


my own position on CRA's is that it is akin to black magic- the voodoo works but only because people believe it does


I'm going to go for the lower tier loan because I was a little tired yesterday and didn't think through the other consideration which is time left on existing loan. in other words - ok I can pay less, but for longer!


thanks
Andy