Need a little bit of advice

the.new.me

I am currently paying my debts off and so far my CC and both catalogues have been paid and closed (not showing on my credit report yet but it will)

I have an over draft of £2000 on my student account which is interest free until I finish my degree in 2018. I have been saving money and putting into rate setter and loaning it out on a 30 day basis. My question is would it improve my credit rating if I put it into my over draft and start paying that off instead, me and OH would like to get a mortgage when I finish my degree and I want to improve my chances as much as possible.

Any help would be gratefully received as I am very clueless about how credit rates work, my credit rating at the moment is poor to say the least but I would like to make it much better.

YorkshireBoy

Whilst lenders like to see settled credit accounts, they also like to see active credit accounts. Now you've closed a credit card and two catalogue accounts, how many active credit accounts will be showing on your credit reports?


Is the student bank account and it's overdraft facility/usage reported on your credit files?


When you say "credit report", are you checking only the free Noddle service or (one of) the main two, Experian and Equifax?

the.new.me

My over draft is showing on my credit report and it reports each month how much I owe, I have my other bank account on there (which has no over draft) too but no other credit, I'm only checking the free Noddle one.

I don't know if my Tesco mobiles would show on Equifax or Experian as I pay them off in full each month and I have never missed a payment (I have two through Tesco mine and my daughters).

solentsusie

Firstly why do you say your credit rating is poor? Have you got defaults and CCJs or just not a lot of history?

Have you got your £2 statutory reports from all three credit reference agencies? Noddle (the Callcredit report) is free online and Experian and Equifax are £2 each. Don't bother signing up to any of the monthly schemes they are a waste of money and the 'scores' on them mean nothing, it is the content of the report that counts - as I am sure you will be told on here by many members!

Personally I would have kept the credit card open and used it just to pay your food shopping etc. and pay it off in full each month. That way lenders get to see that you can use credit responsibly.

Do you have a mobile phone contract or any other forms of credit?

Your credit reports do not show savings accounts so by using you available credit responsibly you will start to build up a much better rating that can be seen by any future lenders.

The best piece of advice is to make sure you never ever miss a monthly payment on a credit account and set up direct debits to pay the minimum payment so this never happens. A good credit history takes time to build.

Good luck.

the.new.me

I have two Tesco mobile which I pay on time every month, my credit rating is poor due to debt left by an ex and we had a joint loan which I ended up paying off in full but I missed a lot of payments then had to make an arrangement with the debt collection agency.

I think I will sent off for the £2 credit reports and see what they say.

The reason I have closed my Vanquis card is because the mess they have made when I had fraud on my account but I am eligible for one with Lloyds who I bank with so I might get one off them and use that as suggested.

Thank you for the advice.

solentsusie

How long ago was the loan paid off? It will stay on your file for six years so that will be affecting your rating currently if it is still there.

The older your 'bad' debts become the less impact they will have in the future and once they are off your file things will certainly improve.

If you can get a credit card with Lloyds and use it responsibly then it will show favourably on your file and help you build a positive history.

Just ensure that all of your current credit accounts, including utilities, are paid on time and you will be building a positive credit history for the future.

Good luck.

the.new.me

The debt was paid off two years ago so it will show for quite a while.