Paying off all my loans on time but my score is getting worse!! Why! Help!?

Dionne88

Hi Guys,

This may seem a little long but i really need the help, so please bare with me and help me if you can....I am a 28 year old female still living at home with my parents I have lived in the same address since birth, I earn £36,000 per year and I am on the electoral roll for my home I have 3 loans with 3 different lenders (1 was my personal loan, one was for my sisters wedding and one was for my mum's house extension.) I took both loans out in 2015.

The loans:

• The first loan I had was with HSBC for £10,000 I paid it off down to £1000 and then took out another loan from them to purchase a vehicle last year. The opening balance was: £19,815 its now down to £17,124 as of April this year. I have never missed a payment and have never been late.
  
• The second loan is with Sainsbury's loans for my sisters wedding opening balance of £18,610 and is now down to £15,198 I have never missed a payment and have never had any late payments.
  
• The third loan is with Tesco Bank for my mum, the opening balance £33,902 and it is now £32,490 no late payments and no missed payments

Other Credit:

• I had a mobile phone contract with Vodafone which was paid off in December last year - no late payments no missed payments
  
• I had a bedroom suite on finance from Barclays partner finance in 2014 for £1600 I now have 2 months left, no missed payments no late payments.
  
• I've had credit card with HSBC since 2014 with a low balance and pay the interest every month with no late payments and no missed payments.
  
• I have a bank account with NATWEST, LLOYDS BANK and a FIRST DIRECT BANK, the account balances are all 0 and not much really goes through them.

My credit file shows up to date with EVERYTHING...However, the issue I now have is that my credit score seems to be falling! I was under the impression that taking out finance and paying it off every month with no late payments or missed payments should improve your score my score started at 680 and was between fair and good back in 2015 but it is now 568 between poor and fair (Closer to POOR)

I recently got engaged and I am looking for a £25,000 loan to pay for our wedding my fiancee doesn't have a good credit score but earns a little less than me however I don't know if I will be accepted as my score is too low (Noddle loan matcher is telling me that I would not be eligible for ANY loans)

My questions are this:

1) How can my score be dropping with all good payments?
2) Has anyone ever experienced this sort of situation?
3) Does anyone know any lenders that will consider me?
4) Does anyone have any advice on how I can increase my score because paying things off on time with no late payments doesn't seem to be working?

I appreciate all answers and any advice and help you can give.

Thanks

Arleen

Score is meaningless, its what is on your file that matters.

You have insane amount of debt for your income, more than twice your yearly gross, not to mention take home! And now you want to tack another one that is in size of your yearly take-home on top of that. No matter what your history looks like, with situation like that and income of 36k/year I wouldn't keep my hopes up for getting that big loan you are hoping for. You simply cannot afford it.

Additionally all those accounts are new and with little history, so they are not really a good measure of how much of responsible borrower are you. Even the 1600 loan from 2014 is not repaid yet. The other big loan that you were close to paying off you winded up not doing so, instead you've extended it to 20,000 GBP, so even that account wasn't settled as of today! Not a good sign.

Are the credit card(s) you have paid in full, or are you paying just the minimum? If they are not paid in full and are not on promotional rate then that is another sign for lenders that your finances are not in a great shape. Otherwise why would you keep paying the high credit card interest rates?

Overal I would say to stay awya from anymore credit and work hard on repaying the mountain of debt you already have. I imagine that servicing it must come to nice chunk every month, and once you move out from parents house it's going to sting a lot. I would also look into simplifying your finances by closing what you don't use, for example the current accounts. Why do you need more than 1?

Edit:
I would also add that 25k debt to pay off is, at least in my mind, best way to start a life together.

Sparky111

You are so heavy with debt on an average income you could sink the belgrano, if I were a lender in a helicopter and you sinking on a ship I would turn tail and leave you far behind, sorry, just the way life is, at some point you become a major liability, that time is now.

CLAPTON

Dionne88 wrote: »

Hi Guys,

This may seem a little long but i really need the help, so please bare with me and help me if you can....I am a 28 year old female still living at home with my parents I have lived in the same address since birth, I earn £36,000 per year and I am on the electoral roll for my home I have 3 loans with 3 different lenders (1 was my personal loan, one was for my sisters wedding and one was for my mum's house extension.) I took both loans out in 2015.

The loans:

• The first loan I had was with HSBC for £10,000 I paid it off down to £1000 and then took out another loan from them to purchase a vehicle last year. The opening balance was: £19,815 its now down to £17,124 as of April this year. I have never missed a payment and have never been late.
  
• The second loan is with Sainsbury's loans for my sisters wedding opening balance of £18,610 and is now down to £15,198 I have never missed a payment and have never had any late payments.
  
• The third loan is with Tesco Bank for my mum, the opening balance £33,902 and it is now £32,490 no late payments and no missed payments

Other Credit:

• I had a mobile phone contract with Vodafone which was paid off in December last year - no late payments no missed payments
  
• I had a bedroom suite on finance from Barclays partner finance in 2014 for £1600 I now have 2 months left, no missed payments no late payments.
  
• I've had credit card with HSBC since 2014 with a low balance and pay the interest every month with no late payments and no missed payments.
  
• I have a bank account with NATWEST, LLOYDS BANK and a FIRST DIRECT BANK, the account balances are all 0 and not much really goes through them.

My credit file shows up to date with EVERYTHING...However, the issue I now have is that my credit score seems to be falling! I was under the impression that taking out finance and paying it off every month with no late payments or missed payments should improve your score my score started at 680 and was between fair and good back in 2015 but it is now 568 between poor and fair (Closer to POOR)

I recently got engaged and I am looking for a £25,000 loan to pay for our wedding my fiancee doesn't have a good credit score but earns a little less than me however I don't know if I will be accepted as my score is too low (Noddle loan matcher is telling me that I would not be eligible for ANY loans)

My questions are this:

1) How can my score be dropping with all good payments?
2) Has anyone ever experienced this sort of situation?
3) Does anyone know any lenders that will consider me?
4) Does anyone have any advice on how I can increase my score because paying things off on time with no late payments doesn't seem to be working?

I appreciate all answers and any advice and help you can give.

Thanks

one assumes this is a joke on a wet sunday
not really funny though

bengal-stripe

Dionne88 wrote: »

I took both loans out in 2015.

opening balance of £18,610 and is now down to £15,198

opening balance £33,902 and it is now £32,490


How can my score be dropping with all good payments?

Forget about your numerical score, but did it never occur to you, the more debt you have, the less credit-worthiness you have. Within a year, you took out new debt in excess of 50k. That's a hell of a lot of money in most people's books.

Once you have paid-down those debts to maybe 30% (how long that will take), then you might look for an additional loan.

ViolaLass

You've done very well to manage to borrow that much!

meer53

Wow :eek: You have £65k of loans and you're looking for another £25k ?

My advice would be to rethink the wedding plans. What on earth will you do if you lose your job ? I would be scared witless with that amount of debt, my credit score would be the last thing on my worry list.

I can't see any lender offering you any further loans. I'm surprised you've got the ones you have !

[Deleted User]

Sounds like you should take a few payday loans to keep your debt level topped up. It's in danger of dropping below 60k.

ViolaLass

OP, to actually answer your question, perhaps not all the loans were on your file when you checked your 'score' in 2015 but it dropped when they started to show and the level of debt you are in became apparent.

Mazfitz83

Your score is irrelevant, the fact you have over £60k in loans is what's going to stop you getting another £25k. The level of debt is what will be bringing the score down though, you might be paying everything on time, but you have a very high debt to earnings ratio. None of my business, but I personally don't understand why you'd take out such massive loans to pay for your sisters wedding and mums extension, should they not be their financial responsibility.

fusionx212

Dionne88 wrote: »

Hi Guys,

This may seem a little long but i really need the help, so please bare with me and help me if you can....I am a 28 year old female still living at home with my parents I have lived in the same address since birth, I earn £36,000 per year and I am on the electoral roll for my home I have 3 loans with 3 different lenders (1 was my personal loan, one was for my sisters wedding and one was for my mum's house extension.) I took both loans out in 2015.

The loans:

• The first loan I had was with HSBC for £10,000 I paid it off down to £1000 and then took out another loan from them to purchase a vehicle last year. The opening balance was: £19,815 its now down to £17,124 as of April this year. I have never missed a payment and have never been late.
  
  
• The second loan is with Sainsbury's loans for my sisters wedding opening balance of £18,610 and is now down to £15,198 I have never missed a payment and have never had any late payments.
  
• The third loan is with Tesco Bank for my mum, the opening balance £33,902 and it is now £32,490 no late payments and no missed payments

Other Credit:

• I had a mobile phone contract with Vodafone which was paid off in December last year - no late payments no missed payments
  
• I had a bedroom suite on finance from Barclays partner finance in 2014 for £1600 I now have 2 months left, no missed payments no late payments.
  
• I've had credit card with HSBC since 2014 with a low balance and pay the interest every month with no late payments and no missed payments.
  
• I have a bank account with NATWEST, LLOYDS BANK and a FIRST DIRECT BANK, the account balances are all 0 and not much really goes through them.

My credit file shows up to date with EVERYTHING...However, the issue I now have is that my credit score seems to be falling! I was under the impression that taking out finance and paying it off every month with no late payments or missed payments should improve your score my score started at 680 and was between fair and good back in 2015 but it is now 568 between poor and fair (Closer to POOR)

I recently got engaged and I am looking for a £25,000 loan to pay for our wedding my fiancee doesn't have a good credit score but earns a little less than me however I don't know if I will be accepted as my score is too low (Noddle loan matcher is telling me that I would not be eligible for ANY loans)

My questions are this:

1) How can my score be dropping with all good payments?
2) Has anyone ever experienced this sort of situation?
3) Does anyone know any lenders that will consider me?
4) Does anyone have any advice on how I can increase my score because paying things off on time with no late payments doesn't seem to be working?

I appreciate all answers and any advice and help you can give.

Thanks

Welcome to MSE you want advice but all they seem to give you is judgemental comments.

OP in relation to your question,
you have a lot of accounts open ie bank accounts that are not doing much, close these down they are still classed as open credit lines so this will negatively impact you.

you should focus on clearing down your balances.

Weddings are an expense not worth taking credit out for. You'll spank a lot of money just for a single day. by all means get married but I'd say do it on What you can afford. get a budget sheet out and then sit down and figure what you can both put away in a pot monthly, you'd be suprised how much you would save in interest alone. you need to be real with yourself though (no judgement here) I know it's easy borrow and get it there and then but there is a very real risk of you getting buried under

[*]The second loan is with Sainsbury's loans for my sisters wedding opening balance of £18,610 and is now down to £15,198 I have never missed a payment and have never had any late payments.

[*]The third loan is with Tesco Bank for my mum, the opening balance £33,902 and it is now £32,490 no late payments and no missed payments

Can I ask why you are paying these back yourself?
are they giving you the money to help? I suspect they are this is how you're affording your credit lines.