Low credit score that never improves...

FallOut

Hey,

First time posting and hoping for some advice. Back in 2013 I had some financial difficulties (lost job/split from partner) and after several months of struggling to maintain payments I finally entered a DMP at the start of 2014, 4 years later, the DMP complete and everything back on track my credit score is still the same, now Im not talking the same as in still poor but its the exact same number that its been since I entered into the DMP in 2014.... is it stuck like this forever??

How do I get this to improve and start been able to look at and plan a future, as at present with such a poor score I wouldnt be able to look at things like a mortgage or car finance (both of which I was hoping to be able to do)?

Additionally, even though the DMP is now complete and everything paid is this going to loom over me until the 6 year mark when the defaults fall off my file.... by this point how long would it potentially take for my score to then recover enough to be viewed in good light by creditors (if a DMP causes this, wouldnt it have been more logical to have just gone bankrupt as now I hold the same limitations as some who went bankrupt but Im the bigger fool as Ive also paid all the money back... and looking at it theres are no prizes for doing so....).

Any help or advice would be very much appreciated

Thanks,

<>Edit<> Forum seems to add !!!8217; randomly

[Deleted User]

Don't worry about it.

The score is entirely made up and only there for entertainment purposes. Lenders never see it.

Lenders will only look at your history, not the random number generated by the CRA

Dobbibill

Hi fallout,

welcome to the forum.

As zx has said, take little notice - the CRAs create the scores based on their perception of you and your finances. They neither lend nor have any information you would put on your application like income.
When they start lending money then maybe take notice of what they are scoring you at
Any defaults will stay on your report for 6yrs as you've rightly said, the further in the past they are, the lesser their impact.
A good broker will be able to look at a suitable lender for someone with defaults.
Congrats on clearing all your debt.

FallOut

Thanks for the replies

So if the score doesn’t mean anything, it must come from something? A reflection on the information which they have to hand, so it would still give some measure as to how potentioal future creditors perceive me?? Or otherwise it’s totally fictitious?

Either way, if the score means something or not, how do I get myself in a position to start doing the things I want to do? Or am I doomed for another 5+ years until I can build a better credit file (history)?

So I would have been better going bankrupt and having the £20k+ in my own pocket rather than the creditors as I’m still going to face the same outlook as someone who chose to go that route rather than a DMP?

If things are this bleak what do people actually do? I’m not really stoked about the idea of waiting until my 40s before I can start building a future again

Dribiddi

I!!!8217;m no financial expert but these things take time. If you!!!8217;ve just cleared yourself of debt don!!!8217;t be so quick to jump back into it. Save some money and keep living within your means. If you defaulted 4 years ago then you are only 2 years away from them dropping off. Use those 2 years to prove to lenders you can be responsible - if you don!!!8217;t already get a credit card, even if it is a high interest poor credit one and manage it. If car finance is a must rather than just a want the car finance marker is open to people with less than favourable credit historys, although if I were you I!!!8217;d save a couple of thousand and get a reliable run around that will get you by for a few years, every penny counts if you!!!8217;re thinking about a mortgage.
Other than that take pride in the fact you dealt with your debts and learn from the mistakes that got you into they position . Good luck

FallOut

Dribiddi wrote: »

I!!!8217;m no financial expert but these things take time. If you!!!8217;ve just cleared yourself of debt don!!!8217;t be so quick to jump back into it. Save some money and keep living within your means. If you defaulted 4 years ago then you are only 2 years away from them dropping off. Use those 2 years to prove to lenders you can be responsible - if you don!!!8217;t already get a credit card, even if it is a high interest poor credit one and manage it. If car finance is a must rather than just a want the car finance marker is open to people with less than favourable credit historys, although if I were you I!!!8217;d save a couple of thousand and get a reliable run around that will get you by for a few years, every penny counts if you!!!8217;re thinking about a mortgage.
Other than that take pride in the fact you dealt with your debts and learn from the mistakes that got you into they position . Good luck

Yeah, it just feels like forever waiting and waiting... and more waiting, then when they drop off the file add some more waiting for the file to recover... tbh people should be saying 10 years not 6 as its going to take that additional 4 before you are back to a reasonable point, and possibly a further few more to be deemed “good” again.

I wouldnt exactly say Im living beyond my means, what would put me in this category? All my bills are paid on time and in full each month, I deposit 10% of my wage into my savings account and then move any remaining money across on the last day of the month, do I need to do something different?

I have a credit card and put my fuel for work on it, work pay my expenses back every two weeks and I pay the money straight against the balance of the card, do I need to pay beyond the balance to improve things?

I already have a car, but it speds a lot of time in the garage and is costing me a fortune to keep on the road, the idea of getting something new would be to prevent this issue and have some trouble free motoring for a few years (Ive tried the “cheap run around” that’s what’s got me in this situation of an unreliable car).

Just seems futile to even make an effort with things, the hard work in paying it off has counted for nothing as I’m no further forward than I was 4/5 years ago, in fact I feel worse off as everything is now on pause until this improves somewhat...

Dribiddi

Definitely sounds like you are doing the right things
Suppose you need to see it from lenders point of view. 4 years ago to a lender considering loaning you perhaps £150k + over 25 years isn’t that long ago. All you can do is keep doing what you’re doing by the sounds of it. If you loaned £1000 to your mate 4 years ago under the proviso they would pay you back £100 a month for the next year and you’d make £200 out the deal, and in fact they paid you £20 a month and it took them 4 years to pay you back and you only made £20 out of the transaction would you loan to that friend on the same arrangement as before immediately after the £1000 was paid back?
My partner with a considered very poor credit rating and 3 settled defaults was able to get car finance at about 8% interest I think so I wouldn’t let these made up credit score numbers completely deter you from pursuing finance, just accept that you likely won’t be eligible for the best deals.

[Deleted User]

FallOut wrote: »

Or otherwise it!!!8217;s totally fictitious?

Correct. It gives no measure of how lenders perceive you, as you can see from your own experience.

Make sure you wait for your card statement before repaying in full. Build good history while you're waiting for the bad to drop off.

Nebulous2

Keep building on the basics and you'll get there.

Make sure you're on the electoral roll, stability of work and address helps, pay bills on time, use credit-reporting accounts.

Try an elegibility checker and look for a second credit card. Use both sparingly, well within limit and pay in full every month. DD may help for payments. Make sure it is set-up and active before relying on it though. Your statement will say if payment will be taken by DD.

Dobbibill

FallOut wrote: »

Thanks for the replies

So if the score doesn’t mean anything, it must come from something? A reflection on the information which they have to hand, so it would still give some measure as to how potentioal future creditors perceive me?? Or otherwise it’s totally fictitious?

It is based on the information they have - this how they (CRAs) perceive you.

You will find you have different scores with Experian, Equifax and Call Credit. One may score you at 304, the other at 267 and the other at 180. None of these are the same, it's just their perception but they don't lend money. Lenders keep their criteria secret so they aren't able to tell you if you would get a car loan or a mortgage it's all guesswork for them but it keeps you going back and looking at your score.

Use your CC as you are but make sure you don't pay it off until the statement is produced otherwise it will report to the CRAs as a permanent zero balance which doesn't demonstrate you are responsible with credit, it just demonstrates you have it but don't use it.

Either way, if the score means something or not, how do I get myself in a position to start doing the things I want to do? Or am I doomed for another 5+ years until I can build a better credit file (history)?

Depending on the dates of the defaults will depend on when they drop off. You don't say how many you have or what dates they were. Check your details with all 3 CRAs free via Credit Club, Clearscore and Noddle and see what dates are held.
The only way to know for certain if you will be accepted for credit/car finance is to apply - defaults won't necessarily stop you but may cause you to get a worse rate than someone without them.

Pixie5740

https://www.moneysavingexpert.com/loans/credit-rating-credit-score