Credit help-complete newbie

SamGriffiths1984

Hey guys

Apologises if this all could have been answered else where.

I was looking for advice on improving my credit. It's been at '10' and now up to '150' on exquifax but '560' on noddle

I've just had a settled ccj drop off last month and this is what is on there now

I'm on the voters register
6 agreements and £660 of credit(half of it is the O2 phone plan), it's my phone x2, very, Aqua United utilities and Virgin

No defaulted payments for 14 months
There is a few defaulted payments on now settle accounts waiting to drop off over the next few years.


just after some advice really. Should I pay off my very and Aqua? I took them out because I didn't really have any active credit and thought it would improve it?

Thank you

Sam x

cakeforbrains

Hi Sam,

Okay, the first thing that you need to know is that your credit 'score' doesn't really matter that much. Each credit reference agency (Experian, Equifax, Call credit/Noddle) creates a 'score' by putting your credit file data through their own calculators. They're all a bit different. So, for instance, somebody can have an 'excellent' score with Experian and an 'average' score with Equifax even though they both have the same set of data.

Additionally, the 'score' that they give you is never actually seen by the bank (or whoever) when you apply for credit. So, if you apply for a credit card, for example, the bank will take the data from one or more of your credit files, run it through their own calculators, and come out with a 'yes' or a 'no', plus your credit limit, depending on what they've found out.

The score that Equifax is showing you isn't completely unimportant, as it shows a very, very general idea of how likely you are to get credit, but what really matters is the content of your file. If you have generally good things then you'll look more favourable to potential lenders, but each lender will have their own specific calculator.

As you've probably clocked, things stay on your file for 6 years (or, if you've closed the account for six years from the point you closed it). Your CCJ dropping off is great news.

Obviously, defaults are bad so make sure you don't get any more of them. Also make sure that you pay everything on time so that you build up lots of nice long green strings of 0s.

With revolving credit, like your Aqua account, the general advice is to spend on them and then pay them back in full each month. This shows financial responsibility and will also mean that, for you personally, you're spending within your means. Saying that, though, some potential lenders might be turned off by that kind of history because you're actually too good with your money and therefore wouldn't make them any money in interest!

You also need to be aware of the amount of your available credit you're using. So, does the £660 of credit you have now mean you're maxed out? Are you up to the limit on your cards and catalogues? Those things don't look good.

Equally, if you pay back your Aqua card and then close it, that reduces your 'available credit' which might mean you still look maxed out. As it looks like it's your only credit card, I would keep it open, use it responsibly, and pay it off in full every month.

Ultimately it's all a balancing act. Pay your bills on time, don't borrow too much, live within your means, stay on the electoral role, and you should develop a great credit file, but you will never be perfect for every lender because nobody ever is.

http://www.moneysavingexpert.com/loans/what-credit-scores-mean

SamGriffiths1984

Thank you so much for your reply!

I am just below the limits of very and Aqua as I thought to improve my rating I had to do minimum payments each month? Most the the money is my phone as I have O2 refresh.

Most of my defaults were from closing accounts where they offered to close them cheaper if I paid it off at once and this left me with lots of settled accounts but showing it was defaulted?

My student loan comes through in September and I may pay very/Aqua/O2 phone off and maybe just use it for say £20 a month and pay full balance monthly? Would this still improve my rating? X

Tixy

Just paying minimum payments would generally be seen as a negative by other potential lenders assessing your credit file. It could be considered an indication that you are in financial difficulty.

If you are carrying balance particularly on a high interest account like aqua then definitely pay them off as soon as you are able.

And then try to just use and repay in full each statement.

SamGriffiths1984

I'll get that sorted!

Thanks guys x

SamGriffiths1984

I have a £40 default against me that I only realised I had last year that I settled. The default happened 1/9/2009 with Vodafone where I closed my account and never to my knowledge received a letter, in fact I only discovered it when I found it on my record. Will that seriously screw me over until 2018? It's annoying for the sake of £40 x

boo_star

SamGriffiths1984 wrote: »

I have a £40 default against me that I only realised I had last year that I settled. The default happened 1/9/2009 with Vodafone where I closed my account and never to my knowledge received a letter, in fact I only discovered it when I found it on my record. Will that seriously screw me over until 2018? It's annoying for the sake of £40 x

Try the mobiles board, http://forums.moneysavingexpert.com/forumdisplay.php?f=14

There's a Vodafone rep over there and they seem to be reasonably good at resolving complaints.

Vodafone

Hi SamGriffiths1984,

As the default date is 1 September 2009, it'll automatically come off your credit file next month.

If you'd like me to double check things, email me with your details via the Contact us form here.

To access the form you'll need to enter the code WRT135.

As well as stating your query in the question box, please also quote "MSE Forum".

Once sent, you'll receive an automated reply with a reference number. Post it on here and I’ll check I've received it.

Kind regards,

Lee

Social Media Comms

Vodafone UK