Why is my credit rating falling?

liamgdr

Since I was 19 I have been trying to get a credit card to build my credit rating, I only applied to the to companies at the bottom of the market i.e. vanquish, capital one etc.

12 months ago when I was 22 I finally got excepted for a Vanquis card with a measly £250 limit. At the time my credit rating was poor (equifax) and 1 out of 5 (noodle). I was delighted that I could finally start building credit.

I have paid the card in full every month and have had no other slip ups financially. My credit rating grew slightly the first 2-3 months but has since tumbled even lower than before I got the card (both equifax and noodle).

There is no explanation on my credit report why this has happened, I'm very frustrated, I'm trying to improve my credit but its backfiring for no apparent reason. My credit limit is still £250 although I was told this would be reviewed after 4 months, so its pretty useless for anything other than buying the odd groceries, so I tend to use my debit card more often. Is it best to be near the limit every month, my current credit card utilisation is 50%.

I have literally no idea what to do, my current mobile phone contract is coming to an end and I want to switch provider but I doubt anyone will except me.

Any thoughts?

Thanks,

Liam.

pogofish

For starters, credit ratings are not credit cards - So you might be better asking in the Credit File and Ratings Forum.

grumbler

accept

Don't pay too much attention to the meaningless figures that Noodle and Exifax (hopefully for free) give you.

[Deleted User]

Might be worth using the card eligibility checker to see if you're able to move on from Vanquis to a less sub-prime card that might give you a higher credit limit and a lower APR.

ricz_1

Some lenders will view a card with a low credit limit as a negative factor as it shows that other lenders are reluctant to trust you with a lot of available credit.

Are you registered on the electoral role at your current address? do you have a monthly mobile phone contract? These contribute towards a good credit history (especially electoral role) but as stated before different lenders look for different things.

MSE artical here is worth a read if you haven't already - http://www.moneysavingexpert.com/loans/credit-rating-credit-score?_ga=1.134933425.1309623952.1422970300

Good luck!

apollo_

Don't worry too much about your credit score, it's essentially a meaningless number. What matters most with credit applications is how you've managed any previous accounts. So long as you have paid on time each month, are registered on the electoral roll and you do not have any defaults or any other issues, then you'll be fine.

It took me a while to be accepted for credit such as mobile phone contracts even though I had never missed a payment but I believe this was because I was not on the electoral roll. I work on a store for one of the mobile phone networks and one of the major reasons for people being declined is because they are not electronically identifiable - as in when we or their details through the system, nothing is found for them. In these instances, it's usually better for the network to err on the side of caution and decline the application rather than risk fraud. I should just point out I do not work in the credit vetting department nor should this be generalised to all providers but this is what I have found.

Just keep on being a good customer and paying your bills on time and it will soon get easy to be accepted for credit.

chrisw99

liamgdr wrote: »

I have paid the card in full every month and have had no other slip ups financially. My credit rating grew slightly the first 2-3 months but has since tumbled even lower than before I got the card (both equifax and noodle).

Paying the card in full is not always the best thing for the credit rating - after all these companies want you to have some balance on the card so they get interest on it, otherwise what's in it for them.

[Deleted User]

chrisw99 wrote: »

Paying the card in full is not always the best thing for the credit rating - after all these companies want you to have some balance on the card so they get interest on it, otherwise what's in it for them.

That's a myth, carrying a balance is not necessary to build good credit.

user1168934

Make sure you are on electoral list.
Do you have any utility bills like landline, energy, water, council in your name? mobile will not count. Make sure you set up direct debits for these. This will improve your rating a lot.
Make sure you have a minimum payment direct debit setup on your account. Occassionally don't clear the balance in full at the end of the month, this will incur some interest but will help increase your limit.
How long have you been living at your current address?

Very important - Check if you are financially connected to some other person - he might be dragging your rating down. For instance, long time ago I was sharing a house with some friends and all of our names were on the council tax bill. One of the guys had bad credit history for not paying mobile phone contracts etc and it was resulting in all of us being denied everything from bank accounts to credit cards to mobile contracts.

Cycrow

citricsquid wrote: »

That's a myth, carrying a balance is not necessary to build good credit.

Its not necessarily better for the bank either.
someone who spends upto their limit every month and clears in full would probably earn the bank more money than someone who holds a balance and just pays the minimum

liamgdr

pogofish wrote: »

For starters, credit ratings are not credit cards - So you might be better asking in the Credit File and Ratings Forum.

But my query about my poor credit is because I believe I may not be using my credit card correctly, everything overlaps.