Improving my credit score?

LibbyL92

Ben8282 wrote: »

Believing in credit scores is a bit like believing in Father Christmas. Concentrate on the information on the credit files and ignore the score.
Why not try an eligibility checker now and see what you may be offered. It can do no harm.

What do I actually need to look for then? I haven’t got any missed payments ect on my account.

Withdrew cash from a credit card a few times last year but nothing for about 6 months (don’t intend to again)

And apart from them being maxed out. What else could it be?

SlovakianGuy

LibbyL92 wrote: »

What do I actually need to look for then? I haven’t got any missed payments ect on my account.

Withdrew cash from a credit card a few times last year but nothing for about 6 months (don’t intend to again)

And apart from them being maxed out. What else could it be?

Your credit utilisation ratio is certainly the main issue. Other than that, depends how old are your other accounts? My score also dropped significantly a few months back, when I applied for 5 new current accounts (for switch incentives). A positive thing is, if the average age of your accounts is at least 1 year. Of course, many years is much better. This is not a big problem, but it may be a contributing factor to your poor rating.

Like people here always say, the score is just a number which other lenders don't see, BUT it surely is an indication of your creditworthiness. After I applied for several current accounts, 2 months later I wasn't eligible even for average credit card, which pretty much was reflected in my poor credit rating.

Also, make sure you have the same address on all your accounts and if you apply for anything, use the same details every single time.

I assume you are not eligible for any credit card at the moment, are you?
If you could get at least some card right now and don't spend on it (or just buy something for 5 quids to keep it active), your credit utilisation ratio would go down, because you would have more credit available to you.


Btw, if you don't want your payments to appear on your report as minimum payments, just add 1 pound to the minimum amount and it shouldn't appear as M (minimum) payment on your report. I only paid minimum once and now there is big "M" on my report for that particular month.

LibbyL92

SlovakianGuy wrote: »

Your credit utilisation ratio is certainly the main issue. Other than that, depends how old are your other accounts? My score also dropped significantly a few months back, when I applied for 5 new current accounts (for switch incentives). A positive thing is, if the average age of your accounts is at least 1 year. Of course, many years is much better. This is not a big problem, but it may be a contributing factor to your poor rating.

Like people here always say, the score is just a number which other lenders don't see, BUT it surely is an indication of your creditworthiness. After I applied for several current accounts, 2 months later I wasn't eligible even for average credit card, which pretty much was reflected in my poor credit rating.

Also, make sure you have the same address on all your accounts and if you apply for anything, use the same details every single time.

I assume you are not eligible for any credit card at the moment, are you?
If you could get at least some card right now and don't spend on it (or just buy something for 5 quids to keep it active), your credit utilisation ratio would go down, because you would have more credit available to you.


Btw, if you don't want your payments to appear on your report as minimum payments, just add 1 pound to the minimum amount and it shouldn't appear as M (minimum) payment on your report. I only paid minimum once and now there is big "M" on my report for that particular month.

Thanks for the info!

Ok, so my cards are rather old 4 years and 3 years, so that isn’t a problem? Also if I pay one off I’ll keep it open rather than shutting it down?

I also have a store card but that is lower than the 30% utilisation but that one is in my parents address when I lived there, hadn’t changed it over but that’s something I will do today!

Adding £1 to the minimum payment is something I’ll do from now on! Makes so much sense.

I will look at trying to get another card out. There must be on I’d be eligible for.

Paul_DNAP

What is the APR on all these cards? Are you overpaying the most expensive first?


I doubt you'll get a fourth card at the moment, focus on paying one of them off and closing it down (the most expensive) and make slightly over minimum payment on the others. (Maybe at the point you could look at replacing it with a 0% balance transfer card, and shutting up one of the others).


Oh, and get this "30% utilisation" myth out of your mind, that's a rumour started by the people who are making vast amounts of money out the interest you're being charged (like the shampoo manufacturers who tell you it's best to rinse and repeat). Really, you want to aim for 0% on them all. And then use the cards for regular but not excessive spending and pay them off IN FULL each month.

adindas

I wonder
Is it really the case now that the lender will favour the credit utilisation vs maximum credit limit (e.g related to annual income ?).

In the past people are suggesting that if you have a high credit limit in comparison to annual income your creditworthiness will suffer, as the lender will see that you have a higher chance of living beyond your mean e.g by maximising your credit limit to the roof and later get default.

In the meanwhile a few people have reported that their credit limit is almost twice their annual income. So it is inconclusive.

I wonder based on people personal experience it is really a good thing for your credit worthiness in case you have a lower credit utilization, even though your credit limit is very high in comparison to annual income ?

If this was true, it is better not to close any credit card you have even you don't use it to keep utilization look low. But I very much doubt about it.

SlovakianGuy

Paul_DNAP wrote: »

Maybe at the point you could look at replacing it with a 0% balance transfer card, and shutting up one of the others.

I personally would keep all card active. Only close one of them if I don't plan to use it at all. It's good to have some credit accounts with a long history. But only if that history doesn't include late payments, etc.

Paul_DNAP wrote: »

Oh, and get this "30% utilisation" myth out of your mind, that's a rumour started by the people who are making vast amounts of money out the interest you're being charged

I think the 30% is actually the upper limit of what is still considered "not bad". Even better is to keep it under 10%. There are websites that say people with excellent credit scores usually have credit utilisation ratio of 7-8% on their cards.


When I took out my first credit card, I asked the card issuer what day of the month they report to credit reference agencies. They said it's usually the first day of the month. So I used to spend on my card normally and at the end of the month I paid off some part of balance, and left the 7% there to get this on my credit report. A couple days later I paid off the rest. Then next month again the same thing. This way, anyone looking on my credit report can see that I use my card regularly and responsibly, keeping me credit utilisation low.

It's easy to do with Asda Money credit card, but Nationwide, on the other hand, reports more informations, including what was the highest balance during the month. At least that's what I can see on my own report. With Asda card I can get on my report exactly what I want. With Nationwide it's not so easy. I would have to spend exactly the amount that I want to appear on my report.

SlovakianGuy

LibbyL92 wrote: »

Thanks for the info!

You're welcome. Let us know if anything changes.

[Deleted User]

The “utilisation” thing is used by the CRA’s as a “score improvement” advisory and should be taken with a pinch of salt - as you’ve already pointed out remaking yet again to people with “excellent credit scores”.

So long as the full payment is made each month it matters not how much is “utilised”.

LibbyL92

I’m just feeling so confused and lost.

The only thing I can do is pay one down as much as I can whilst doing the other one minimum payment +1 on the other card and hope to see a change in the next few months.

It’s all so confusing and very vague.

I’m up to date with all my payments, always pay on time (minimum payments mostly) but obviously my issue is having too much used credit

I guess it’s a case of paying them both down and hoping for the best!

[Deleted User]

Pay the cards down yes by all means.

But stop focusing on the score/rating and the “advice” the CRA’s give.