Help with credit file/score. Can 1 credit card be impacting my score?

Dowsett

Ive been looking through Noddle for awhile now and for some reason it has dropped last month. Score went from 3/5 to 2/5 and from about 700 to 560. The only financial change ive made is taking out a new deal on a mortgage(which is better) and reducing my overdraft every month this year.

I joined Clearscore yesterday and its a similar story. Im in the middle of the spectrum.

I haven't missed a payment on anything for about 5 or 6 years. I was registered on Eroll but for some reason i was taken off in 2012. Have since rejoined in the beginning of 2015. Lived at same address for 7 years. previous address (parents) for about 5.

I have the following accounts:

Current account: was £1000 overdraft at Jan '15. Its now £400 and will be £300 next week.

Barclaycard (6.8%APR): 12k out of possible 14k credit. Got sent a letter saying they are going to up my limit by another 5k in Nov. Im going to cancel this though. Been paying more than the minimum. Only ever paid the min payment once or twice. never missed any payments.

Mortgage - Not sure what to say.. not much can be done about borrowing large amounts other than a mortgage.

02 Phone contract. Only just taken this out as my previous PAYG phone broke. Never missed payments.

Ive been trying to reduce my overdraft on my current account this year as im being charged the most per month to use it. So i am pretty much out my overdraft with now only £300 limit.

I would like to be able to get accepted for some 0% balance transfer deals on credit cards but all eligibility checkers are rating me as 4/10.

So, could the barclaycard be impacting my entire score?

Im not sure what else i can do to improve my file. Any suggestions?

TIA

Candyapple

Ah so it’s you again. So you finally revealed your credit limit/how much you owed. I told you the £575 was in relation to your credit limit.

90% of £14k = £12.6k. That is the max what Barclaycard would allow you to use to for a balance transfer. Since you have already used up £12k of your limit whether through purchases or whatever, I’m guessing your exact total you owe is £12,040, hence why your offer was only for a maximum of £560 (£12,600 minus £12,040 = £560).

There is no such thing as a credit score, this is a marketing gimmick by the credit reference agencies. You should only concentrate on your credit history.

With regards to your credit history;

1. If you’ve only got 1 credit card, 1 bank account and 1 phone contract, your file does look a bit slim so that may go against you.
2. Yes you have a high limit card, however you are close to the limit meaning your credit utilisation rate is 85%. Given most lenders like to see 50% of below this will go against you in gaining more credit. This is probably the biggest factor.
3. Are you showing as being on the electoral roll now on all 3 credit reference agencies? Not showing as being on it for at least a year minimum will probably go against you.

If you want to be accepted for new credit, you need to try and clear some of that £12k debt to lower your credit to debt ratio. For example, as a rough guideline, if you wanted to obtain a new balance transfer credit card to clear your £12k debt your annual salary would need to be circa £56k.

Sometimes the MSE checker is not accurate and there have been reports of people getting 30% chance of a card, applying and being approved. You could always risk one application for a card as one search will barely impact your credit history if you get declined.

Dowsett

Candyapple wrote: »

With regards to your credit history;

1. If you’ve only got 1 credit card, 1 bank account and 1 phone contract, your file does look a bit slim so that may go against you.
2. Yes you have a high limit card, however you are close to the limit meaning your credit utilisation rate is 85%. Given most lenders like to see 50% of below this will go against you in gaining more credit. This is probably the biggest factor.
3. Are you showing as being on the electoral roll now on all 3 credit reference agencies? Not showing as being on it for at least a year minimum will probably go against you.

If you want to be accepted for new credit, you need to try and clear some of that £12k debt to lower your credit to debt ratio. For example, as a rough guideline, if you wanted to obtain a new balance transfer credit card to clear your £12k debt your annual salary would need to be circa £56k.

Sometimes the MSE checker is not accurate and there have been reports of people getting 30% chance of a card, applying and being approved. You could always risk one application for a card as one search will barely impact your credit history if you get declined.

I started out with a capital one card. Used that to build credit. Got accepted for a barclaycard long term low APR deal. cancelled capital one. Ive had previous phone contracts, just went on pay as you go for a couple of years. I only have 1 account with an overdraft, the rest are just normal accounts.

The balance is going to be getting reduced in the next few months. Maybe i should leave the 5k limit increase to gain more available credit....

I am only signed up to two, Noddle and Clearscore. both showing on electoral roll. Waiting for barclaycard to introduce free experian score.

I havent applied for any credit as of yet but was thinking of just using the capital one 0% balance transfer for 6 months, even to clear £500 which would be easily cleared in couple months. Cancel it then see what my chances are like on a better card.

Thrugelmir

Dowsett wrote: »

I started out with a capital one card. Used that to build credit. Got accepted for a barclaycard long term low APR deal. cancelled capital one.

To build a credit rating also requires paying the money back. The fact that you live in a constant overdraft as well. Suggests that you are only a months pay check away from financial disaster. As is the case with mortgages that are now heavily regulated. Lenders are now becoming increasingly wary of acting responsibly. As in due course there'll be far tougher regulation of unsecured credit as well. Getting slowly ahead of the game is how lenders will approach the task.

JimmyTheWig

Candyapple wrote: »

Sometimes the MSE checker is not accurate and there have been reports of people getting 30% chance of a card, applying and being approved.

Yeah, I've heard that happens to around 3 in every 10 people who apply...

JimmyTheWig

Dowsett wrote: »

The balance is going to be getting reduced in the next few months. Maybe i should leave the 5k limit increase to gain more available credit....

I agree with this plan.
Owing £12k on a £14k card looks much worse than owing £12k on a £19k card.

was thinking of just using the capital one 0% balance transfer for 6 months, even to clear £500 which would be easily cleared in couple months

Is there a Balance Transfer fee to do this?
If you pay a 3% fee and pay it off in 6 months then I make that approximately 12% APR. You'd be better off keeping it on the Barclaycard.

Dowsett

JimmyTheWig wrote: »

I agree with this plan.
Owing £12k on a £14k card looks much worse than owing £12k on a £19k card.


Is there a Balance Transfer fee to do this?
If you pay a 3% fee and pay it off in 6 months then I make that approximately 12% APR. You'd be better off keeping it on the Barclaycard.

Yes there is a 3% fee. Its just annoying some times that even though my credit file should be 'ok' im not being accepted. I tried for an MBNA card around Feb and got declined for which they couldnt tell me why.

And i was accepted for the barclay card when i was in a worse financial situation. I actually think i am only 12k away (yes i know its not a small number) from being debt free. I consider myself to have done quite well to get rid of other outstanding debts and overdrafts.

I will leave any applications until i have the extra 5k on the card and try for a 0% again to see if that works.

Thanks

JimmyTheWig

Well done for getting those debts down. Yes, £12k is a large debt, but it's all relative isn't it - in many ways I'd rather have a large debt that was getting smaller than a small debt that was growing.

Every credit application, whether successful or not, is recorded on your credit file. The more you have the more you look desperate for credit. So I'd say only apply for credit if it is worthwhile.
Transfering to 0% for 6 months for a 3% fee will be more expensive than not doing so. So don't bother to apply for such a card.
If you think you'll qualify for, say, a 24 month 0% deal with a 3% fee then that's worth a search. But I agree that you should at least wait until the Barclaycard limit increase is showing on your credit reports (can take a month after getting the increase, I believe).