Improving Credit Score

srisport

Hi All,

My partner has had a VERY poor credit score for a while now (due to unemployment and family debt). We are looking for our own place within the next year and her credit score worries me as i would prefer to get a mortgage with our wages combined and not just rely on mine because my credit score is VERY good.

I believe her score has been damaged because of miss payments, several store cards and unemployment. She's had mobile phone contracts, car finance in the past and has never defaulted on any of these.

the current situation is that she is now down to just one store card which currently has a direct debit set up on monthly installments in order to clear the debt, she has 2 phone contracts in her name and a bank account. She is working full time and has a regular income for the past 6 months.

What can we do to help improve her Credit Score?

kind regards.

Gaz83

Ignore it, first of all. They are useless.

DCFC79

What matters is the credit history, if she can run her bank account very well and pay off a credit card each month then it will help.

Thrugelmir

srisport wrote: »

What can we do to help improve her Credit Score?

Nothing other than behaving normally and saving hard (though clear the debt first).

Good credit scores require little more than common sense.

srisport

Thrugelmir wrote: »

Nothing other than behaving normally and saving hard (though clear the debt first).

Good credit scores require little more than common sense.

We have an appointment with her bank next week to discuss opening a credit card account with a realistic limit and have her spend and make regular monthly full repayments.....

Would this be a good or bad move in her situation?

Kind regards.

On_my_way

Just be careful as banks exist to make money. You are both better off studying these forums to find ways to seriously cut down on BOTH of your spending and pay any debt.

You both need to have substantial savings to get a mortgage but nothing is impossible. If you both really look at your outgoings you can encourage other to spend less, save more and for her to pay back her debts as soon as possible.

solentsusie

srisport wrote: »

Hi All,

My partner has had a VERY poor credit score for a while now (due to unemployment and family debt). We are looking for our own place within the next year and her credit score worries me as i would prefer to get a mortgage with our wages combined and not just rely on mine because my credit score is VERY good.

I believe her score has been damaged because of miss payments, several store cards and unemployment. She's had mobile phone contracts, car finance in the past and has never defaulted on any of these.

the current situation is that she is now down to just one store card which currently has a direct debit set up on monthly installments in order to clear the debt, she has 2 phone contracts in her name and a bank account. She is working full time and has a regular income for the past 6 months.

What can we do to help improve her Credit Score?

kind regards.

When you say a poor credit score have you actually looked at the information in her credit file not just the made up 'scores'? This is the important information that any creditor looking to lend to you will be looking at.

You say that she has monthly direct debits set up to one creditor for payments. Did she default on the account?

I would be surprised if your bank will give her a credit card if she has recent defaults on her file.

She needs to ensure that she keeps all of her credit commitments up to date and doesn't miss any payments. Make sure that direct debits are set up to take minimum payments so none are missed from now on.

A good credit file takes a while to build, particularly after you have had problems in the past.

Good luck.

20aday

solentsusie wrote: »

When you say a poor credit score have you actually looked at the information in her credit file not just the made up 'scores'? This is the important information that any creditor looking to lend to you will be looking at.

You say that she has monthly direct debits set up to one creditor for payments. Did she default on the account?

I would be surprised if your bank will give her a credit card if she has recent defaults on her file.

She needs to ensure that she keeps all of her credit commitments up to date and doesn't miss any payments. Make sure that direct debits are set up to take minimum payments so none are missed from now on.

A good credit file takes a while to build, particularly after you have had problems in the past.

Good luck.

BIB: Given the OP's partner's past financial problems I'd also be surprised if the bank grants them any form of credit also (assuming they are mentioned on her credit files?)

Furthermore some banks use something called: "Right to Offset." If she was successful in applying for a credit card and fell into arrears on the account then they may use funds from another account to meet the repayments until the credit card is brought up to date.

JakeGreen

Anecdotally, I had a mortgage application rejected in December 2013 because my credit report showed that I was near to the limit on one of my Credit Cards...

Despite the card balance being cleared in full in October 2013 ( I did a lot of refurbishment in the summer of 2013 and put everything on my Barclaycard to get the cashback)

We gave the mortgage company/underwriter statements showing the zero balance but I received the typical 'computer says no' answer.

So my advice to you is:
Reduce the balances on all your borrowing way in advance of applying for a mortgage.
Pay more than the minimum payment each month
Don't have any late payments in the past 12 months
Wait until you've satisfied the above before applying for a mortgage

srisport

solentsusie wrote: »

When you say a poor credit score have you actually looked at the information in her credit file not just the made up 'scores'? This is the important information that any creditor looking to lend to you will be looking at.

You say that she has monthly direct debits set up to one creditor for payments. Did she default on the account?

I would be surprised if your bank will give her a credit card if she has recent defaults on her file.

She needs to ensure that she keeps all of her credit commitments up to date and doesn't miss any payments. Make sure that direct debits are set up to take minimum payments so none are missed from now on.

A good credit file takes a while to build, particularly after you have had problems in the past.

Good luck.

We both use Noddle to regularly check our credit history and to check what searches have been done on us. we have also used Experian in the past but only to take advantage of the 30 day free trial.

She did have 2 online catalogue accounts opened in her name but used by her mother. One is now fully re-paid (unsure on the payment history) The other still has outstanding debt and because both were faced with unemployment last year, this account did have around 5 missed payments recorded on it. Since October last year a direct debit was set up to ensure the minimum payment was met. The current debt stands at about £300ish

Unfortunetly the damage to her accounts had already been done when we got together and im slowly trying to help her limit any more damage being done to it. but like you said, these things take time but we will get there eventually.

JakeGreen wrote: »

So my advice to you is:
Reduce the balances on all your borrowing way in advance of applying for a mortgage.
Pay more than the minimum payment each month
Don't have any late payments in the past 12 months
Wait until you've satisfied the above before applying for a mortgage

Thankyou for your advise

Regards.