unfair credit rating

Patricia_Lindsey

My son asked for a bank loan and was refused as poor credit rating. When he checked there was an outstanding debt for £9 from O2 from 4 years ago. He contacted them and they then removed the debt. When he contacted bank again they said would probably be refused again even if gone as a refusal was on his credit history. He tried again and was refused and advised to get a credit card to improve his rating. As he was hoping to get a mortgage in the near future this has spoled his chances,. Any advice would be apprecitaed

~Beanie~

As far as I am aware, refusals don't show on a credi file, just the initial search.

Have O2 actually removed the debt or just recorded that it has been satisfied? To be honest, having no credit history at all can be as bad as a poor one as lenders cannot assess how good (or bad) you are at repaying things. If he has no other credit commitments, getting a credit card and paying it off every month is not a bad idea, it will help him build a credit record.

ashp_2

Yes assuming there is no other late payments or defaults on the report (or other reports) and your son has been on the electoral role for a few years. Lack of credit history would probably be the main reason for refusal along with the amount of hard credit searches in the last 6 months.

Building credit history with a credit card and managing his bank account effectively will help alot. Electoral role is also vital.

DCFC79

Credit ratings aren't taken into account so that isn't the reason for refusal.

Lenders don't even see the ratings so in effect are useless.

ashp_2

DCFC79 wrote: »

Credit ratings aren't taken into account so that isn't the reason for refusal.

Lenders don't even see the ratings so in effect are useless.

Erm I wouldn't agree with that. They have to come to a decision somehow.

I would agree the score they show is useless but come to a decision based on their "rating" from your history.

David_White

It sounds like your Son has a default from O2 on his credit file.

I'd suggest he takes a look at his credit report (Noddle is a free service) and if O2 have indeed put a default for such a small amount I would get him to make a complaint and ask them to remove it.

If your Son tries to get credit in the future the provider would see that a search had been done by his bank, but not whether the check was approved or declined so don't worry too much about that.

Good luck

DCFC79

ashp wrote: »

Erm I wouldn't agree with that. They have to come to a decision somehow.

I would agree the score they show is useless but come to a decision based on their "rating" from your history.

Your scored or rated based on your history and the information provided at application.

Cycrow

ashp wrote: »

Erm I wouldn't agree with that. They have to come to a decision somehow.

I would agree the score they show is useless but come to a decision based on their "rating" from your history.

You have a credit record, which is your history of credit (upto 6 years)

Each creditor will take that information to score you, how they score you and what that score means is different for every company, and could vary between different products from the same company, so you dont have a global credit rating.

Also, its not just information from your credit file thats used in this scoring process, information they already hold about you as well as information you give them during the application process is also used