Improving File With Default

bobbyb182

Hi there. I had a rocky few years about 10 years back and ended up in a really bad way, financially. Now I am back on my feet, but due to the errors of my past, I am still finding it hard to get credit.

Clearscore is showing my score as zero negatives, yet experian shows me at one negative which defaulted in 2015 with a zero balance. With me having it paid off, can I get this removed? I have no idea what it's for, but having to wait another 4 years due to something I didn't know about would be a shame.

Thanks for any help you can provide. I'm new to trying to fix myself financially, having just tried to keep my nose clean for 8 years after my fall.

[Deleted User]

It will stay there for 6 years from default.

If you don't think it should be there at all you can dispute it.

Make sure you also check Equifax, so you have a full picture of your credit history.

Make sure also that you look at the full reports - not the scores or the positives and negatives dashboard, which are the CRAs view only, and not particularly useful.

bobbyb182

Thanks for the reply.

I took a look at the full report (must remember to cancel that free trial) through experian and it advised something happened in 2013 with a debt of 110. It's now showing 0 but the account defaulted in 2015.

Am I being naive to believe if that's the only negative on the report, that there's nothing I can do to improve my situation apart from wait out until 2021?

[Deleted User]

Time will improve your file - the impact of the default will reduce over time, before the 6 years is up. It's not an all or nothing situation.

Just make sure that the rest of your credit is now managed properly, so you build a solid history.

bobbyb182

Yeah I have a credit card with an extortionate apr. Needless to say I don't use it often, maybe for Christmas for my 2 year old but we only spend what we can afford. No overdrafts, no late payments. Just wasn't sure if there was anything I could do to improve it other than that as I'd like a more functioning bank account.

Here's to anothwr 4 years eh? Lol

[Deleted User]

Use the card regularly.

It doesn't matter what the APR is, because you're going to use it for your regular shopping and clear in full every month. No extortion needed by either side.

bobbyb182

I haven't always cleared it in full each month, being totally honest, but it's been a case of them giving me a 15 pound minimum payment and me giving them 100 payment. So I'm always way above it. I was down to 23 pound balance this month but the wife being off work (summer holidays) means my wages have to cover the house bills and my mot in this time period.

[Deleted User]

That's the biggest long term issue you need to address. Being unable to clear a small balance tells lenders you have no disposable income, so they won't advance further credit.

Visit the DFW boards for tips on how to cut costs so that you can clear it. It will then be much easier to use it for small amounts and clear in full every month.

But you will need discipline to not use it for anything you cannot clear.

bobbyb182

Does it not still improve even though I make more than the minimum payment? Genuinely didn't know that!

I used to clear it in full, but just these last few months have been tough. It's the same each year. Plus we got married in May which obviously sunk a few grand lol.

[Deleted User]

Minimum payment or more is obviously better than missing payments and show that you can make repayments.

But on the assumption that no one would want to give away their own money in interest each month, it tells lenders you're short on cash and are living beyond your means.

And in the event you actually DO want to give away your money, it tells them that you're a nutjob. Either way, it makes you higher risk.

StopIt

bobbyb182 wrote: »

Does it not still improve even though I make more than the minimum payment? Genuinely didn't know that!

I used to clear it in full, but just these last few months have been tough. It's the same each year. Plus we got married in May which obviously sunk a few grand lol.

This is where score and history really clash.


Your score might still improve when carrying a balance and paying more than the minimum. You'll look at that and think "Great".


Lenders however will see a non cleared balance, and factor that into your affordability criteria. Basically speaking, if you're carrying a balance on a credit card, and apply for a loan, say, you'll be judged on the ability to repay both, and the higher the balance, the higher the risk.


Your score may well mean you'll be accepted for more products, the history and risk will dictate the rates you receive. More risk, more interest.


You rarely get an interest rate lower than what you've already borrowed, unless if you've naively went to a high interest route when better options were available to you at the time.