Conflicting advice - improving my credit rating

BrandNewStart

Hi all

I finished paying off all my debt in February this year via a Christians Against Poverty DMP. Predictably my credit rating is now poor. When I went to my bank (Natwest) for advice, they said the best thing to do was to do nothing and "let it heal" - I know from reading on here that it takes 6 years after a DMP. However when I look on MSE it seems like i should be trying to get a high % credit card so I can pay it regularly to start building my rating up again.

I would be very grateful for any advice as to the best thing to do!

I should add that these forums are wonderful and were a massive help in helping get debt free :T Life is much easier now and I'm saving every single month. I am just working on not feeling as stressed out by money, without much success!

Cheers

[Deleted User]

Get a card and start rebuilding, if can get one.

BrandNewStart

Thanks, I don't know why the bank have told me not to. Does anyone have any ideas?

Superscrooge

The bank employee may have thought that with a recent DMP your chance of getting a credit card was slim and that leaving it for a few months would improve your chances.

Getting a card, using it regularly and paying the balance in full each month will help to show you can be trusted with credit.

Try the MSE eligility checker to see what your chances of acceptance are
https://creditcards.moneysavingexpert.com/?bad-credit&_ga=1.66616942.157308799.1449507210

If low, then leave it a couple of months and then try the eligibility checker again

mwarby

Probably also a factor that you wouldn't be eligible for the banks products, and they won't want to advise getting a card elsewhere

Also to be fair the DMP will have a big impact for some time, there's no rush to go back to credit, and the repair value to many banks will be small while larger issues are waiting to drop off

mwarby

OP it may be worth sharing if you have any credit ambitions in particular, eg a mortgage

Thrugelmir

What does obtaining a credit card prove? You've just got yourself clear of debt. Statistically people that start using credit again reoffend. That's human nature. There's no quick fixes to rebuilding a credit score. Only time. The fact that it's your first thought suggests that you haven't fully learnt the lesson and totally changed your ways.

BrandNewStart

Thanks mwarby. Yeah I guess it is for a mortgage one day. I certainly am in zero rush to get a credit card in order to spend money. Why would I want to do that?

Thrugelmir that's quite a lot of extrapolation from one post by someone you don't know.

Anthorn

BrandNewStart wrote: »

Hi all

I finished paying off all my debt in February this year via a Christians Against Poverty DMP. Predictably my credit rating is now poor. When I went to my bank (Natwest) for advice, they said the best thing to do was to do nothing and "let it heal" - I know from reading on here that it takes 6 years after a DMP. However when I look on MSE it seems like i should be trying to get a high % credit card so I can pay it regularly to start building my rating up again.

I would be very grateful for any advice as to the best thing to do!

I should add that these forums are wonderful and were a massive help in helping get debt free :T Life is much easier now and I'm saving every single month. I am just working on not feeling as stressed out by money, without much success!

Cheers

So you've paid off all your debt with the aid of a Debt Management Plan and now you're looking into improving your credit history. The only reason to do that is so you can get credit. So does that mean that you intend to build up more debt?

The bank could be right in advising waiting for it to repair itself: All depends on what credit accounts you already have which are reported to the CRAs including energy, telephone, rent, mortgage etc. Get your credit reports and see what is on there.

Overall, credit improves a credit history provided your contractual obligations are met. But really in your situation credit should be avoided.

BrandNewStart

So does that mean that you intend to build up more debt?

No. But short of somehow saving up the entire cost of a house on my salary I might one day need a mortgage. Although maybe that shows I've got the wrong mindset and am still too worried by things like that, so I can see on one level Thrugelmir & Anton have a point here.

More broadly though you've all given me food for thought. Just cos my credit rating's bad doesn't mean I need immediately to fix it. And am I still in the mindset of "keeping up with the joneses"? A lot to chew on. I am never going back to where I was before - it was years of stress and heartache and I am only just out of it.

TheShape

I can see why other posters would be hesitant to recommend that someone who has not long concluded a DMP should get a credit card, I can also see why you might want to rebuild your credit score/credit worthiness. You never know when having access to credit might be useful in the future.

If you are certain that you won't run up unmanageable debt then use the MSE eligility checker and apply for a card if you have a very good chance of getting one. Pay it off IN FULL every month.