What should I do?

pcn2014

Hi everyone!

I recently checked by credit rating...I was surprised to find out that I have a 'fair' rating as I've never missed a DD payment. I don't have a credit card and don't need one, I don't spend more than I need to.
But how do I go about improving my credit score??
(I'm a recent graduate and only have 1 DD at the moment)

Thanks for the advice,

PCN

[Deleted User]

You don't. Your score is irrelevant and not seen or used by anyone.

To build a good credit history. The best way is to get and use a credit card regularly, paying in full each month

With little credit history you will be viewed as high risk, so try either your own bank or a sub prime provider like aqua or Vanquis.

Also make sure you're on the ER.

pcn2014

thanks for the reply.... I have a couple of questions.

Would getting an overdraft limit on a current account help improve my credit score?
Also would I have to make purchases using a credit card for my credit score to improve, can I not get a credit card and not use it?

[Deleted User]

An overdraft can make you look trusted by other lenders.

Read what I wrote about credit scores.

Nebulous2

It sounds as though you are doing a good job in having stable finances, but unfortunately you aren't showing you can use credit responsibly.

There are lots of basics - be on the electoral roll, pay things on time etc.

However you could be doing with using credit. I think a credit card is better than an overdraft to do that. Get a card, pay things you would buy anyway with it - don't create extra expenditure or cost to improve your record. Then pay your bill in full on time every month.

Do you have a mobile? That provides another way of showing you pay your debts regularly.

ukamber1

pcn2014 wrote: »

Hi everyone!

I recently checked by credit rating...I was surprised to find out that I have a 'fair' rating as I've never missed a DD payment. I don't have a credit card and don't need one, I don't spend more than I need to.
But how do I go about improving my credit score??
(I'm a recent graduate and only have 1 DD at the moment)

Thanks for the advice,

PCN

Just wanted to confirm....take no notice of your credit score, credit agencies are just trying to give you a rough guide to how your credit file looks. Lenders look at the details and dont see the credit agency scores, as they have their own score system. I check my credit files for all 3 credit agencies and never look at my score, as its the information in it, that counts. The main thing is just checking each of the big 3 (Experian, Equifax and Callcredit) just to make sure everything is correct. As for credit, it is good to have something....an overdraft or a credit card, which you use and pay off each month is a good idea as it shows you can manage credit well and that will give Lenders more confidence in you.

best wishes

MataNui

Generally to get credit you need to be seen to be able to handle credit. You may think a lack of any debts and paying from savings/cash is good money management but a lack of credit history makes it difficult for prospective lenders to determine if you are a 'good' risk.

ZX81 isnt quite right about your credit score. Its true that nobody else will see it and that its specific to that CRA but its not irrelevant. When you apply for credit the lender will use the information held by CRAs (so a solid address history, electoral roll, current credit, past history of credit) to come up with a number (or in some cases a simple yes/no) which they use to decide if they will lend to you or not.

For your credit score the CRA is doing something similar. So if for example the CRA says your score is 'Excellent' what they are saying is that they have lots of positive information about you. They can confirm your identity and address, you are currently not overloaded with debt, you have had lots of credit in the past and have handled it well. In short all the information they would pass on to a prospective lender is overwhelmingly positive.

Of course lenders use slightly different criteria and will weight it differently so your score isnt any sort of guarantee but its a useful gauge to the information that lenders will get about you.