"Reset" credit file?!?

imcallumwbu

Hi there,

So I am 18 and I got off to a bad start by trying to take out credit cards, which damaged my report as I had only just got it and it was filled with rejections... and then I spent the last 5 months taking out monthly wonga loans. As you can understand my credit report is pretty bad right now, and to make matters worse I have just changed my bank account last month. I am looking to get a new car on finance within the next year or so but I have been rejected dozens of times due to my credit rating. I am a full time employed heating apprentice and I earn £10,000 p/a, this will go up to £12,500 in January. Realistically how long will it take to get my credit score to the point where I can get car finance and credit cards etc and what do I have to do to achieve this?

Nasqueron

1) Stop applying for credit, it makes you look desperate and no lender will touch you until these searches drop off
2) Concentrate on building a good credit history - did you get a credit card? If so, focus on spending and paying that off in full every month.
3) Ignore your credit "score" (cancel any memberships to Experian or Equifax or Call Credit - they are a waste of money)
4) Payday loans will always look bad to lenders, it smacks of you living beyond your means - if you don't have money, don't spend it, don't just borrow money

I'm no expert but I would imagine a year is very unlikely that you would find a reputable dealer who will give you affordable finance (remember you have to pay it off every month or they'll end up taking the car back off you) - if you can afford the monthly payments then save the cash and get a £1000 run around rather that trying to get further in debt which your history suggests you cannot handle.

Obviously we don't know your situation but I do hope you are not one of these young fools who gets a first job and thinks that means you can suddenly get an A3 or Golf GTI or similar - remember you have to factor in insurance (will likely be 2-3 grand based on your age), fuel, tax, repairs etc - on your salary I would be buying a push bike or finding a company that provides a vehicle

imcallumwbu

Nasqueron wrote: »

1) Stop applying for credit, it makes you look desperate and no lender will touch you until these searches drop off
2) Concentrate on building a good credit history - did you get a credit card? If so, focus on spending and paying that off in full every month.
3) Ignore your credit "score" (cancel any memberships to Experian or Equifax or Call Credit - they are a waste of money)
4) Payday loans will always look bad to lenders, it smacks of you living beyond your means - if you don't have money, don't spend it, don't just borrow money

I'm no expert but I would imagine a year is very unlikely that you would find a reputable dealer who will give you affordable finance (remember you have to pay it off every month or they'll end up taking the car back off you) - if you can afford the monthly payments then save the cash and get a £1000 run around rather that trying to get further in debt which your history suggests you cannot handle.

Obviously we don't know your situation but I do hope you are not one of these young fools who gets a first job and thinks that means you can suddenly get an A3 or Golf GTI or similar - remember you have to factor in insurance (will likely be 2-3 grand based on your age), fuel, tax, repairs etc - on your salary I would be buying a push bike or finding a company that provides a vehicle

Hi there and thanks for replying. I did not manage to get any sort of credit cards. At the moment I have a car and I pay things like the monthly insurance etc. I was just wondering how long it will take for my credit to recover to the point where I will be able to begin building up my credit, and how I would build it up. I was also wondering if a mobile phone contract would help increase my credit score. At the moment I am just paying my living costs, car fuel, tax and insurance, I do not have any other outgoings. So I was wondering if anyone has advice on what to do in terms of rebuilding a credit score from what seems to be the very bottom.

Thanks

Nasqueron

OK big point to set you out in life:

Credit SCORES are meaningless

There, I just saved you a load of worry and hopefully money (you can get a report on your account from Experian or Equifax for £2 or use Noddle for free). A credit ratings agency does not lend you money so how they rate you is meaningless, all that matters is what the info on there says.

Credit reports improve over time, they are not there to punish you but to advise lenders what you are like, so people can put bad times behind them and the negatives like PDL and credit applications lose impact over time - I would ensure you do not have any more applications for 6 months and do not take out any PDL. After 6 months try ONE of the credit builder cards (assuming your bank do not offer one - they at least see your income) e.g. Aqua, Vanquish, Capital One - borrowing and paying off in full every month will make you look a better prospect after 6 months (so 12 months from now).

If your car still runs then why do you need to replace it - is it because it's not worth fixing to get through an MOT or just (to be blunt) a vanity thing?

A new car even with 1 years no claims will still be expensive to insure and add on finance....

If you can afford say £100-£200 a month (I'm assuming you will not get 0% finance and won't have a big deposit and not trying to buy something silly) then why not save up over the year and you'll have £1200-£2400 to buy a newer run-around without getting into any debt. When you factor in paying interest on your finance especially for a cheap car, is it really worth paying....

What car do you want, how much are you looking to pay, how much can you afford a month?

imcallumwbu

Nasqueron wrote: »

OK big point to set you out in life:

Credit SCORES are meaningless

There, I just saved you a load of worry and hopefully money (you can get a report on your account from Experian or Equifax for £2 or use Noddle for free). A credit ratings agency does not lend you money so how they rate you is meaningless, all that matters is what the info on there says.

Credit reports improve over time, they are not there to punish you but to advise lenders what you are like, so people can put bad times behind them and the negatives like PDL and credit applications lose impact over time - I would ensure you do not have any more applications for 6 months and do not take out any PDL. After 6 months try ONE of the credit builder cards (assuming your bank do not offer one - they at least see your income) e.g. Aqua, Vanquish, Capital One - borrowing and paying off in full every month will make you look a better prospect after 6 months (so 12 months from now).

If your car still runs then why do you need to replace it - is it because it's not worth fixing to get through an MOT or just (to be blunt) a vanity thing?

A new car even with 1 years no claims will still be expensive to insure and add on finance....

If you can afford say £100-£200 a month (I'm assuming you will not get 0% finance and won't have a big deposit and not trying to buy something silly) then why not save up over the year and you'll have £1200-£2400 to buy a newer run-around without getting into any debt. When you factor in paying interest on your finance especially for a cheap car, is it really worth paying....

What car do you want, how much are you looking to pay, how much can you afford a month?

I am not really bothered about a car. Just my current one is 14 years old and I have just spent £500 on it and it requires even more work... I need a new one really. My bank do offer credit cards and I have been with them about 1 month now. I have ordered my credit report from experian for the £2 fee, and I suspect it will only come back with credit card rejections and PDL, but I just want to make sure their is no errors. Both of those on my credit report I assume clear after that 6 month period you mentioned?

Nasqueron

I think the searches will vanish yes (could be wrong, don't take it as gospel). Actual finance such as PDL will probably be 6 years like all finance - it's just over time they have less of an impact as it shows you have moved on from that period.

Don't get another old car on finance - when you whack interest on top it'll be far more than it's worth, just you need to explain what car you are thinking of, how much and what you can afford a month then people can help you on here budget

Experian_company_representative

Hi Imcallumwbe,

One of the first things to check, to start improving your credit history is to make sure that you are registered on the electoral roll.

Lenders will often use this to help confirm you are living at the address you have applied from, and if you are not showing on the electoral roll they will often decline an application. If you are not yet registered to vote you can find out more here.

If you have a lot of recent searches lenders may also decline an application, as they will think that you are in danger of getting over-committed. We would advise that you try to limit the number of applications you make, ideally with no more than 3 in a six month period. Once the searches are over a year old they come off your Experian report.

If you have been making the payments to your Wonga loans on time then they will not necessarily be seen as negative by all lenders. Our Ask James page covers this here, however if you are taking regular payday loans it can been seen that you are relying on them to get by.

As your existing accounts mature they will be seen as positive information on your report, so ensuring all your payments are on time, and limiting your applications will help your report to improve.

I hope this helps we also have a information booklet on credit for young people and students here that you might find useful.

Kind Regards
Neil

imcallumwbu

Thanks you guys.

I will try and keep my report clear for the next 6 months and try some form of credit then to see how things are going, maybe try in August some time to be safe? I think I am on the electoral roll, is there any way to check this?

CKhalvashi

You need to call the council concerned, although a pack should have been sent to you in last few months for the new individual registration. These need to be sent back

Ideally no more than 3 searches in the last 6 months, and as mentioned above, saving over few months.

I paiid £350 for a Focus ST earlier this year, so there definitely are deals out there. If you are stuck, try your local scrapyard (where mine came from), as there are usually dealer part exchanges that aren't worth selling, but are too good to scrap

imcallumwbu

CKhalvashi wrote: »

You need to call the council concerned, although a pack should have been sent to you in last few months for the new individual registration. These need to be sent back
I paiid £350 for a Focus ST earlier this year, so there definitely are deals out there. If you are stuck, try your local scrapyard (where mine came from), as there are usually dealer part exchanges that aren't worth selling, but are too good to scrap

I have sent off that much paperwork over the last 6 months I have no idea if I have or havent... I do remember something about the electoral roll though and I vaguely remember sending something regarding that off...

And as for the car, I paid 450 for a peugeot 206 xreg and its cost me 800-1000 on repairs so far and theres still a few knocks and bangs, however a car is a car and that is at the back of my mind right now. I just want my credit sorted...