What am I doing wrong?

edin08

Typical story - back in 2009 I was rather foolish and ended up defaulting on two accounts - I won't go into the reasons why, but it was my own fault. One account was for £345 and the other for £622, so just under £1000 in total. The £345 default will drop off in September this year and the £622 one will drop off in December. They have both now been paid in full and are fully satisfied.

Since then I've been much better - I have no debt except for a small amount that I purchase on my Aqua card and Capital One card each month. I've had my mobile phone contract for several years and I've had various other credit agreements on my account since 2009 with a sea of green ticks. I'm on the electoral roll with only one search in the last year and I earn a reasonable salary (£26,000). I am hoping to purchase a flat when the final default drops off on 2 December, so either later in December of the beginning of next year - I know I wouldn't be able to get a mortgage with defaults on my credit file.

I still seem to struggle to get credit - and I know there is no hard and fast rule for everyone, but I've read on here about people being able to get prime credit cards and open up new bank accounts after defaulting many more times than I have, and after only a few years since they defaulted. What am I doing wrong? I know I have an Aqua and Cap One card, but I had hoped to have a "normal" credit card, or a small overdraft so I could further improve my credit rating in preparation for a mortgage, but I seem to be declined each time I try. I've tried the various soft searches and they come up with typically 40% change of approval at best, with most being 0%.

I'm aware I could just wait until December, after all, it is only a few months away (Xmas time anyone!?) but I'm worried I won't get a mortgage if I only have a Capital One card with a £250 limit and an Aqua Card with a £800 limit.

Any help would be appreciated!

Thanks

Mark

Candyapple

Have you tried your own bank for a credit card?

Are you on the electoral roll?

Any financial associations/links with others?

Have you checked that everything is being reported ok across all 3 credit reference agencies?

If nothing further is amiss, I would perhaps wait until the first default falls off in September and apply for a card in October to test the waters. Perhaps something like Barclaycard Initial or Fluid card?

Or if you really wanted to play it safe, just wait until both defaults have dropped off and then the entire banking world will be your oyster again. Ignore any ‘scores’ and such like, just make sure you have saved a decent deposit and you should have no problems getting a mortgage.

edin08

Thanks for your reply Candy Apple.

I'm on the electoral roll, I've checked my credit report with Experian, Equifax, Call Credit and Noddle - everything is fine except for the two defaults over 5 years ago.

I've been with my current bank for 8 years (TSB) - never once been overdrawn and have my salary paid into it, yet they say they can't offer me an overdraft or a credit card because of "information provided from the CRA" (which will be the two defaults).

I understand that defaults make it difficult, but I don't understand why these two - comparatively small and historic defaults - are causing such an issue still. I've read of folk being able to access mainstream credit after only a few years, so I just thought I'd check I wasn't doing anything wrong.

Thanks for your help.

Candyapple

Don't believe everything you read, take it with a pinch of salt. Some people may exaggerate, some lie for whatever reason or some may just be lucky.

I was like you, but as soon as my default fell off, perfect credit history was restored and I was able to take my pick of credit cards and bank accounts.

Also, some banks/card companies are harder to get than others as they require squeaky clean credit history and even then, sometimes you just may not fit their customer profile.

If TSB don't want to lend to you, switch to another provider who will and get a switching bonus in addition.

Try the Barclaycard Initial MBNA Fluid card if you really can't wait, but personally I'd just wait out the 5 months and then try again with the bank first.

edin08

Thanks once again for replying. Perhaps people do exaggerate - I'm fine with waiting until December.

I'm not in any need of credit, I just wanted to maybe have a "normal" credit card. I'm just worried that when the defaults come off, I'll be turned down for a mortgage as I will only have two sub-prime credit cards.

I assume that you're access to decent cards and other products happened as soon as your last default dropped off?

Anthorn

edin08 wrote: »

Typical story - back in 2009 I was rather foolish and ended up defaulting on two accounts - I won't go into the reasons why, but it was my own fault. One account was for £345 and the other for £622, so just under £1000 in total. The £345 default will drop off in September this year and the £622 one will drop off in December. They have both now been paid in full and are fully satisfied.

Since then I've been much better - I have no debt except for a small amount that I purchase on my Aqua card and Capital One card each month. I've had my mobile phone contract for several years and I've had various other credit agreements on my account since 2009 with a sea of green ticks. I'm on the electoral roll with only one search in the last year and I earn a reasonable salary (£26,000). I am hoping to purchase a flat when the final default drops off on 2 December, so either later in December of the beginning of next year - I know I wouldn't be able to get a mortgage with defaults on my credit file.

I still seem to struggle to get credit - and I know there is no hard and fast rule for everyone, but I've read on here about people being able to get prime credit cards and open up new bank accounts after defaulting many more times than I have, and after only a few years since they defaulted. What am I doing wrong? I know I have an Aqua and Cap One card, but I had hoped to have a "normal" credit card, or a small overdraft so I could further improve my credit rating in preparation for a mortgage, but I seem to be declined each time I try. I've tried the various soft searches and they come up with typically 40% change of approval at best, with most being 0%.

I'm aware I could just wait until December, after all, it is only a few months away (Xmas time anyone!?) but I'm worried I won't get a mortgage if I only have a Capital One card with a £250 limit and an Aqua Card with a £800 limit.

Any help would be appreciated!

Thanks

Mark

I really feel for you because it was a long, hard slog for me for 6 years before I got my MBNA card and still not the 6.5% APR I applied for even through my credit history over 14 accounts some current and some settled is greener than green. Banks would give me an overdraft of several thousand pounds but not a credit card. And I could go on and on.

Part of your problem might be who owns the bad debt accounts. If that's the likes of Lowell everyone viewing your credit history will know you defaulted, failed to pay and the debt sold on. Also note that settled accounts stay on your credit history for 6 years from the settlement date.


Part of the problem could be the length of accounts. An account with a history of 6 years is better than an account with a history of only 4 years. It's in this area that my credit history suffered. So don't go chopping and changing bank accounts and credit cards. If you're chasing incentive payments keep accounts long term such as a main bank account. A bank account with an overdraft facility but not necessarily with an overdrawn balance is better.

Lastly still prevalent is lenders grouping applicants according to experience of similar account holders according to for example where they live or their occupation.

Keep at it and you'll get there and look after your credit history.

m4rc

Anthorn wrote: »

Part of your problem might be who owns the bad debt accounts. If that's the likes of Lowell everyone viewing your credit history will know you defaulted, failed to pay and the debt sold on. Also note that settled accounts stay on your credit history for 6 years from the settlement date.

I was under the impression that people looking at a credit file could NOT see who you owed money to, just the type of account - credit card, mail order etc. That's the reason it doesn't matter (for this purpose) if you have a sub-prime or prime card, they can't punish you for only having sub-prime credit.

Additionally, I'm sure the record is cleared from your file 6 years after the default is registered, if you settled it 5 years 11 months later it doesn't mean you have to wait another 6 years, it still vanishes a month later. That was certainly the case for me anyway, I paid up a default I didn't even know I had 5 years and 4 months after the default, it was marked as settled and 8 and a bit months later it vanished from my file, it didn't mean it started again.

I could be wrong and could just have been lucky, I'm not strutting round stating facts, I'm making comments from experience I hope may be useful and could have got it all wrong!

Anthorn

m4rc wrote: »

I was under the impression that people looking at a credit file could NOT see who you owed money to, just the type of account - credit card, mail order etc. That's the reason it doesn't matter (for this purpose) if you have a sub-prime or prime card, they can't punish you for only having sub-prime credit.

You could be right. I've never credit-checked anyone and I don't suppose anyone has on MSE or not many anyway. But if they can't see who owns the account how do they know who you owe money to and I do know they know that because they can distinguish between for example a prime card and a sub-prime card.

m4rc wrote: »

Additionally, I'm sure the record is cleared from your file 6 years after the default is registered, if you settled it 5 years 11 months later it doesn't mean you have to wait another 6 years, it still vanishes a month later. That was certainly the case for me anyway, I paid up a default I didn't even know I had 5 years and 4 months after the default, it was marked as settled and 8 and a bit months later it vanished from my file, it didn't mean it started again.

I referred to settled accounts and not defaults. But the difference between a default and a settled default is debateable since the information we have conflicts and is ambiguous. Does a settled default drop off six years from the default date or six years from the settled date. In my experience when a default is settled the status changes from default to settled so therefore it stays for 6 years after the settlement date. In my own case I have a settled British gas account that was at one time a default and has been on my credit history for 7 years and probably on there for another 3 years. Complicated isn't it.

I

m4rc wrote: »

I could be wrong and could just have been lucky, I'm not strutting round stating facts, I'm making comments from experience I hope may be useful and could have got it all wrong!

IainHL

m4rc is correct. If an account has been defaulted on your credit file, and stays defaulted on your credit file (and there really is no reason at all why it should not, unless it was incorrectly defaulted in the first place and you challenge that), then it will drop off 6 years from the date of default. This is irrespective of how much you may, or may not, have paid off the defaulted amount in the intervening 6 years.

Similarly, and as far as I am aware, lenders performing a search of your credit file cannot see who the accounts are with, merely what sort of account they are. So rather than just "loan", there is loan, hire purchase, payday loan, credit card. Of course they may make inferences about the sort of credit cards you have from the credit limits on those accounts, sub-prime cards normally having lower limits than mainstream cards.

newuser78

I can echo what other say - it does get easier once defaults disappear from your credit files.

Do you have savings? I have a sizeable ISA with Santander and as soon as my bankruptcy dropped off, and after checking all credit files are correct, I applied for a 0% credit card with Santander which got approved pretty much quickly. I did wonder if me being a saver helped with approval.

Either way, hold off any credit card applications till:
1- your defaults get erased from your files in December
2- £2 for statutory report from all 3 CRAs (around Feb-Mar 2016). Any mistakes, get it corrected
3- Apply for a credit card

Also it might be worth closing one of your existing credit cards unless you need them?

edin08

Thanks everyone.

I know my credit score from Experian is meaningless, but I wanted to check - 792, so it's marked as "Fair". The average age of my accounts is 98 months. I've been with my current bank for around 8 years. I have £27,000 in a savings account with them and it's remained untouched for around 3 years. I save £500 each month into a separate ISA with the same bank, and have done for the past 10 months. I asked for a £100 overdraft - they declined. I've enquired about a credit card, also declined.

I've attempted to move banks - but they decline me for a "normal" bank account and offer a basic bank account instead. I've got a "normal" account now, but they just won't allow me an overdraft or any facility to credit.

After being stuck renting for years, I want to move quickly and buy somewhere when the defaults drop off. I'm hoping that it's just the fact that the two defaults are there that's causing the issue - when they both drop off, everything else should be fine :-)