Slow Progress

Iwillresolvemydebt

Hi, I have come a long way in resolving my debt and want to continue in the same way to get a decent rate on a mortgage asap.


I have cleared all problem debts except one (which no longer shows on my credit file/s) - £5000


I have two current accounts (one with overdraft facility)


One catalogue (who keep on increasing my limit - £1500 debt vs £8100 credit) - Is this likely to go against me?


Two credit cards - one which I am paying off (circa £120 left) and one which I use and pay off each month


Nothing else on my report - even in closed accounts. No CCJ's or other bad data yet my noddle report shows 2/5 and 556 score (I am aware I shouldn't dwell on these but they must reflect in some way!!)


Any advice please on what I need to do to improve? Getting frustrated now as my debts are clearing and bad points dropping off but credit availability is slow progress...

Iwillresolvemydebt

Just noticed on Clearscore that I am "in a good place"... With a score of 400 out of 700... This also suggests I also have a way to go...


I also forgot a recent finance purchase for a TV which shows on neither Noddle or Clearscore - I guess it is likely to be on Experian.


I could have paid cash for the tv but thought, rightly or wrongly, that by taking it on finance and of course keeping up with payments, it will show good history - Have I done the right thing?

shortcrust

One of the many downsides to credit scores is that people think they have be always doing new things to improve the score. You're doing the right things already. Just carry on as you are, but stop applying for new credit if you want a mortgage soon.

The scores are a marketing tool. They're designed to keep you going back to the sites and to get you to pay extra for advice on how to improve them. Read a few threads on this board and you'll realise that people with wildly different circumstances can have similar scores, and vice versa. Lenders don't see these scores. They just see your credit report and it sounds like your report will look ok.

Iwillresolvemydebt

Thanks - I am aware it is a marketing ploy - one which I have not fallen for other than to assume that there is some correlation between the figures they give and your credit worthiness. Surely there has to be hasn't there?!

shortcrust

The problem is that there's no single measure of 'credit worthiness'. Each lender looks for different things. For example, one might look at a high credit limit and think it's a positive because others lenders trust you, whereas another might think it's too much available credit and view it as a negative.

The scores are presumably based in some way on your data - although at times you have to wonder - but I honestly don't think they reflect credit worthiness. People have come on here with very high scores but absolutely no credit history at all. No one will lend to them in a serious way and they can't understand why because their score is excellent. Other people come on complaining that their score's dropped 200 points because of minor changes such as a new credit account or a couple of new searches, when the real world impact on credit worthiness is probably quite low. I've read recently that there are people with 2/3 on Noddle who have a higher score than others who have 5/5. It's all nonsense from a practical perspective.

What do you think you should doing that you're not? There's no longer any bad debt on your file. You've got quite a low level of current debt which you're repaying. You're using a card each month and clearing the balance. It's fine. Just leave things as they are and create the impression like your finances are steady and stable.

Remember that your credit report is only a small part of the data lenders look at. Size of deposit, income, type and length of employment, financial commitments etc are all incredibly important.

Iwillresolvemydebt

Thanks again. So as I mentioned in the original post, my catalogue company (who I have paid off numerous times but are very convenient) keep on increasing my limit. Would this reflect well in my credit file or not? I have no intention of using all of this credit, should I get it reduced?


Just read some further posts elsewhere on the forum where it has been advised that someone had done the same as me (TV on finance) - he was advised to pay this off early if he can. Is this reasonable advice or would it have no/little impact? I will ensure I pay it off each month anyway - my viewpoint that it would soon be a settled loan which is positive I understand!

shortcrust

No disrespect to the OP of this link, but it's an excellent example of what we've been talking about.

https://forums.moneysavingexpert.com/discussion/comment/68813604#Comment_68813604

I think it makes sense to pay off as many debts as you can a few months before going for a mortgage, but a loan for a TV probably won't make a huge difference if it's just a few hundred. It's more about the affordability calculations that anything else. Any debt is going to mean they'll lend you less. If you want a closed account on file, the catalogue might be a good one to do. It wouldn't hurt to lower the limit if you keep it open, but I don't think catalogue limits are worried about as much as credit cards.