Credit Help

Faintlol

Hi folks,

Discovered this site a few weeks ago and hoping someone can help me out!

I understand from reading on here that the credit score you get from the 3 main CRAs are basically made up, however all 3 are scoring me as very poor so figure there must be something in the scores.

The background to this is that I recently had my laptop break which I use for work, and I went to get a loan to cover the cost of a new one. I didnt think this would be an issue - however to my surprise i was declined! :mad:

Downloaded Clearscore and noticed that an account which I thought should have been closed and settled had defaulted. (IPad with EE). I called them and sorted it, and without getting into the details they amended my credit report to show as being fully satisfied and never having defaulted.

I had a few late payments back in 2014 when I was struggling for money, however Experian is telling me it's now been 40 months since my last payment.

My question here is how can my ranking still be classed as very low? I have had credit in my own name since I was 18, for a phone and a car and have never been knocked back before. The only thing I can think of is my current credit card utilisation is sitting at 97%? ~£730 on cards with a £750 limit. My limit is due to go up on the 17th of this month to £1500 - however will this really have a big impact upon my ability to obtain credit?

Should also mention that I've now got 2 hard credit checks on my file, as I didn't think for a second that I would get knocked back.

Many thanks for any advice you may be able to give me.

Chris

[Deleted User]

Your ranking is low because the random number generator has given you a low ranking.

What appears in all three files? It seems to only have one low limit card. Is that it currently?

What's your income?
Are you on the ER?
How much was the loan you applied for?
How many late payments?
Are you clearing the card in full each month?
Are you in your overdraft?

Faintlol

Thanks for the reply.

Currently 2 credit cards - one with Capital One, the other with Vanquis. 500 limit on the Capital One, 250 with Vanquis, due to increase to 1000 on 17th April.

Income is £18k.
Yes on ER.
Loan - £2500 over 36 months - to cover laptop + clearing of credit cards.
3 late payments in a row - Oct, Nov, Dec 14.
No not paying off fully.
Yes in my overdraft - was a bit stupid in my student days - particularly around money.

[Deleted User]

It's the last two which are the killers. It tells lenders you have no disposable income, or you wouldn't be carrying small debts, so you can't afford further credit.

Cut your costs and get those cleared. You'll need to be spending less than you earn to service a loan.

Faintlol

I suppose that makes sense.

Will this still be the case when my limit increases? I have £730/£1500 used on my cards?

I wouldn't be applying for the loan if I didn't think I could afford it (apologies if that sounds cheeky don't mean it like that). I currently have £600 disposable income a month as still living with parents and no rent etc.

Have you any tips for the best way to clear this? Is it worth while me looking into a balance transfer card?

Thanks again!

[Deleted User]

If you have disposable income, pay off the card and the overdraft

You need to clear it, not shift it somewhere else.

Sncjw

If you have £600 a month left over what are you spending that on. Clear your overdraft because the interest will be high for that. Also pay your credit cards in full each month to avoid the rolling interest.

How much is the laptop you want to buy.

Faintlol

What am I spending the money on? In short - crap.

Overdraft is still at student rate so is not being charged any interest at this point. However I have now realised I need to clear these so will be attempting to clear both cards inside the next 2-3 months, then will worry about overdraft.

Laptop is £1300 - replacement MacBook. However it's not essential, it just prevents me from working at home.

The most important thing for me at this stage is to get my file cleared up so that when I go to buy a house in a year or two I dont have anything detrimental on my credit record.

Candyapple

If you have £600 spare each month, why do you want to pay interest on a loan? Just save the money for 2 months!

If you are looking to buy a house in the next year or so, wait until 6 years have passed from that last late payment. You should also:

- Clear your overdraft ASAP and then get rid completely
- Clear your credit card debts and then apply for a mainstream card(s) and then close the Vanquis and Cap One cards as their low limits is not appealing to lenders and also they are subprime cards
- Learn to budget. If you are wasting £600 on crap every month you need to tackle this now before you even think about taking on a mortgage
- Save every penny you have whilst you are living rent free and make sacrifices to boost your deposit amount
- Keep an eye on all 3 of your credit files to make sure everything is ticking along nicely

Faintlol

What would you consider to be a main stream card?

If I'm being totally honest, I've had my head in the sand and have just ignored of all this. I have always been able to obtain credit and this rejection has made me realise I need to sort this sooner rather than later.

Thank you for all your help on this.

To lead on from the whole mortgage thing, obviously looking way down the road but myself and my partner are eligible for co-ownership, what is your opinion on this? Is it worth it as from what I can tell you would need a much smaller deposit?

Also, my partner has never had credit, I would assume this would work against her when applying? What is the best way for her to build? A CC that she clears every month?

Candyapple

I have no clue about co-ownership, you'd be best asking that question over on the mortgages board:
http://forums.moneysavingexpert.com/forumdisplay.php?f=15

A mainstream card is any card with a high street bank or known lender such as American Express, MBNA etc.

Basically mainstream cards offer you much better APR's than subprime cards and you also get higher credit limits rather than subprime cards which are £250-£1k. You also open yourself up to the world of 0% purchase/balance transfer cards or earning points/money for using credit cards. Subprime cards are for people who are new to credit and want to build a history or for people who have a poor credit history due to late payments/defaults etc and no mainstream company will give them credit.

If your partner has never had credit then yes she should start now by applying for a subprime card and start building up a credit history.

Both of you should make sure you are on the electoral roll and that your bank accounts/mobile phone/credit cards are showing as being paid and up to date.