Why is my score this low? Please help!

[Deleted User]

Not always.

Credit scores, especially Experian's, punish change, As a result, 18 years old and bankrupts can score highly, as they don't have any active credit.

Paying off your debts, on the other hand, and therefore reducing your risk, lowers your score.

So the ideal Experian customer is an 18 year old bankrupt who never pays off their debts. There's one or two lenders who disagree with that...

lizferris1984

Hi everyone - just wanted to add an update here because progress has been made!

I paid one of my defaults (£200) with the debt collector. I have re-activated my credit card account and have paid the balance in full. So I now have £0 balance on that card. This is my only credit card, I plan to use it for groceries as someone suggested here, and pay in full each month.

Turns out I didn't have any AP markers - I got that wrong. Credit card was showing as paid up to date, just maxed out on the balance until I paid it off.

I updated my preferences on the electoral roll - I have opted back in to the open register. Not sure if this makes a difference or not, but have changed it just in case.

I was also accepted for a small personal loan (just £500) which I used to pay the credit card balance & part of my other default. Repayments are easily affordable, and should also help my credit report repaying this.

I am now left with remainder of my other default still to pay. Credit utlization has decreased & despite a few declined applications have been accepted for the small loan. I obviously won't make any more applications now for another year at least. Date is marked in my diary.

I know I may be told off for saying this (!) but Experian score has gone up by 70 points.

Thank you to everyone for your help/advice.

Ben8282

Forget the meaningless score.
However, consider the information on your credit files and ask yourself honestly what sort of risk lenders may think you pose.

lizferris1984

Ben8282 wrote: »

Forget the meaningless score.
However, consider the information on your credit files and ask yourself honestly what sort of risk lenders may think you pose.

See post above - just added this now. I think I've made some good steps forward in the past few weeks. Not sure if other forum users will agree or not, but I'm happy with the result for sure.

Ben8282

Yes you have made progress. But with £75K saved up as a house deposit why ever did you take out a loan for £500! You commented in an earlier post that people on the forum has assumed that you don't have money which was not correct. I am not questioning whether you do or don't have money. But what you have done is a) demonstrate that you were unable to repay your quite small debts without further borrowing and b) that your financial situation was such that you needed to take out a loan for as small a sum as £500 at, I would imagine, a quite high APR. I hope that you didn't use a payday loan company.
You have actually only repaid the £200 default with your own money. You have borrowed to settle the credit card and part of the second default and the remainder of the second default remains unpaid.
How does someone with £75K in savings default for such small amounts and have to borrow to repay such small amounts?
What were the declined applications for? Why did you make them? This really does make you look desperate for credit.
Again I can ask the question. A potential lender will have no knowledge of any savings. What sort of impression as to your finances will be gained from the current situation?

[Deleted User]

As above not sure why you took out the loan with that much aside in savings.

And loans in credit report will make a lender question why you can’t get by day to day without a loan

ViolaLass

NEVER pay interest in order to boost your credit report.

vacheron

Hi Liz.

Glad you are making progress, but just to prove how utterly worthless credit "scores" are, here is mine when I logged into the MSE credit club just 5 minutes ago:

CLICK HERE

In this same week I have applied for three 0% cards and was accepted for all of them with the following limits:

HSBC £9,000
Tesco £5,600
Barclaycard £11,300

....so read from that what you will! :rotfl:

Paul_DNAP

Well done on the progress so far, but I would add my note to say I also feel it seems strange protecting savings with so many smaller debts and defaults hanging around you. Particularly if that is intended to be a house, you need to get your affairs tidier for the mortgage I assume?
Seriously consider denting your savings and squaring off every credit card and paying every default as soon as possible. And then keep some savings ring-fenced as your "short term emergency fund" (i.e. become your own pay day lender, take £500 from that if you're short and pay it back in again.) - do not go anywhere near a commercial organisation to borrow £500 for a few weeks if you want your credit history to sparkle. And pay your credit cards off IN FULL every month for a while. And don't apply for any more cards for a while, especially the "sub-prime" high rate ones.

lizferris1984

Ben8282 wrote: »

Yes you have made progress. But with £75K saved up as a house deposit why ever did you take out a loan for £500! You commented in an earlier post that people on the forum has assumed that you don't have money which was not correct. I am not questioning whether you do or don't have money. But what you have done is a) demonstrate that you were unable to repay your quite small debts without further borrowing and b) that your financial situation was such that you needed to take out a loan for as small a sum as £500 at, I would imagine, a quite high APR. I hope that you didn't use a payday loan company.
You have actually only repaid the £200 default with your own money. You have borrowed to settle the credit card and part of the second default and the remainder of the second default remains unpaid.
How does someone with £75K in savings default for such small amounts and have to borrow to repay such small amounts?
What were the declined applications for? Why did you make them? This really does make you look desperate for credit.
Again I can ask the question. A potential lender will have no knowledge of any savings. What sort of impression as to your finances will be gained from the current situation?

I don't have £75k in savings - yet. As stated in post where I discussed this. I have a small amount in savings now, but obviously couldn't use this to pay for anything other than mortgage deposit, because it's not an instant access account.

I'm not desperate for credit - and to be honest those applications will drop off my record in not too long. I've already said I won't be applying for anything else for a year. Loan was not a Payday loan at all, no. Obviously it's not brilliant APR but how could it be?

It was a £500 loan not £5000. In terms of repayment, it's not going to take long to pay this back. I don't see why it's so terrible to put it bluntly. I am simply not in a large amount of debt versus my income, so why the panic.