Credit report decrease because of credit card

imcallumwbu

So I have been struggling with getting credit as I am only 19 and I made too many tries for credit as soon as I turned 18, where my credit account was not set up so I was rejected. A few months ago after keeping a careful eye on my credit report, all of the searches were gone off my file, so I applied for a credit card with Capital One and I was accepted with a £500 limit. As I am coming up to my holiday I decided to buy all of my clothes etc on that; therefore maxing out my card. All was good and well as I could pay off the £500 every month, but now I have checked my credit file and according to Experian I now have a "Very Poor" credit report.
So my problem here is that I need a new car coming September and I was wondering how long it will take for me to correct this and get my "Good" score back? Will I be able to just clear my debt for a month and then Experian will update my report as using a lower percentage of my credit allowance therefore raising my report, or is this gonna take 12 months or something to repair?

Thanks in advance.

DCFC79

Well for a start no 1 I repeat no 1 sees your credit score or whether it's poor, very poor etc. It was mentioned last year credit scores/ratings meant naff all.

What bills do you have ?
Do you have a job ?

You still the apprentice, surely you have savings if you don't have many bills ?

I take it you still have entries from Wonga on your credit file ?

Tixy

Don't worry about the experian scores/ratings, a potential lender won't see them.

So what is reported on your file currently - is it just the one credit card with a £500 limit and nearly £500 balance?

If so then get it paid off as soon as you can, and don't apply for new credit until the next monthly update that shows no balance or a minimal balance on the card.

For future reference its probably best to keep well below the limit of a card.

imcallumwbu

My bills are £140 rent to my mother, £140 car insurance monthly, £20 car tax monthly, and whatever bill my credit card comes to. I am employed full time as an apprentice with a standard wage of £965 a month, plus overtime of about £350 a month.

Yes I still have entries from wonga etc.

The things that are affecting my credit report negatively are as follows:

You do not have enough historic revolving credit account data available to calculate a balance trend.

The average age of your credit accounts is 6 months.

Your highest credit limit on a single revolving credit account is £500.00 or less.

You have opened 1 new credit account in the last 6 months.

The usage of your available credit indicates a higher risk.

And the positives are:

You have 5 settled non-mail order credit accounts.

Your total non-mortgage credit balance is £408.00

You are using 2 non-mortgage credit accounts

Tixy

Paying off as much as you can from the balance will help, and is the only one of those items that you can impact on in the short term.

Are the 5 settled accounts all payday loans? if so then regardless of what experian may indicate they are unlikely to be viewed as a positive factor by a potential lender.

You may well struggle to get a loan for a vehicle based on the information. How much were you hoping to borrow, do you have sufficient savings to just by a cheaper car outright?
I would definitely wait until you have had the cap 1 account for more than 6 months before applying.

imcallumwbu

I do not have any savings as I fly off to Greece next week for a fortnight. I currently have a car but I doubt it will pass its MOT inspection, and then there is things such as insurance etc that all factor in, even if I did buy a car for say £1000, id still be hit with massive insurance premium raises etc, which a loan would help me avoid.

cakeforbrains

imcallumwbu wrote: »

I do not have any savings as I fly off to Greece next week for a fortnight. I currently have a car but I doubt it will pass its MOT inspection, and then there is things such as insurance etc that all factor in, even if I did buy a car for say £1000, id still be hit with massive insurance premium raises etc, which a loan would help me avoid.

From your earlier post it looks like your insurance is very high - as is to be expected for a nineteen year old. It's not helpful to see loans as something that help you 'avoid' costs, though, as you'll still have to pay for it, plus the interest of the loan on top.

Can you fix the car you've got?

Tixy

If you have been unable to save any money currently then any potential lender will be concerned that you won't be able to afford the monthly repayments on a loan.

You will need to pay insurance etc whether you have a newer car or keep your existing car, the cheapest option will likely be to pay for any work needed to get the current car through its MOT (assuming it doesn't need thousands spent on it).

Then in say 6months time you should have more credit history, some savings to put towards a newer car, and will have the advantage of being able to sell your existing car with say 6 months MOT which would make it more valuable than a car with its MOT about to run out.

imcallumwbu

There is absolutely no chance of getting my current car through it's MOT, I know a bit about cars myself and it needs a lot of work, needs new suspension on all corners, brake lines replaced throughout, new exhaust, new handbrake, new brake pads and rotors, I expect it will cost me about £800 to fix, and thats if I did all the work myself, I purchased the car over a year ago for just over half of that.

However, does anyone know the actions to take to rid myself of as many of those points that are affecting my score, within say 6 months?

Tixy

The only real factor you can influence is reducing the balance on the capital one card.

What other current credit account appears on your credit file as well as the credit card? is it a mobile or something?

But even if your credit history was 'perfect' potential lenders don't just look at your credit history when making a lending decision, they consider other factors as well, e.g. what your basic income is compared to the amount you want to borrow etc.

imcallumwbu

I do not have any other credit accounts, I have my bank account and my Cap1 credit account, aswell as 4 closed wonga loans and a closed Lloyds bank account.