Excellent credit score decimated

geordie28

Hi there
I am anxiously hoping that I will be able to get help with correcting my credit score. I previously had an excellent credit score. I am 39 and have always paid everything on time. I have had a mortgage for 7 years, a loan for 5 years, and always had bank loans, credit cards, mobile phone accounts and bills paid on time. In 2018 I completed a balance transfer on 1 credit card but miscalculated interest and still owed £9. This was unpaid for 10 months. I could have quite easily paid it off. When I noticed I contacted the credit card company and they eventually agreed to reduce the charges. They refused to remove the defaults and would only remove the fines if I agreed to leave it at that. I agreed at the time and thought I would take the hit on my credit score. I am now looking to sell my flat and buy a property with my partner and discovered the change to my credit score is monumental. It is now 393 which is considered very poor. I admit to being at fault for the unpaid £9 but feel like I am being severely punished. If the credit card company decline to help is it likely the financial obudsman will assist? Does anybody have any advice or experience of this?
Sorry for the long post

dr_adidas01

geordie28 said:

Hi there
I am anxiously hoping that I will be able to get help with correcting my credit score. I previously had an excellent credit score. I am 39 and have always paid everything on time. I have had a mortgage for 7 years, a loan for 5 years, and always had bank loans, credit cards, mobile phone accounts and bills paid on time. In 2018 I completed a balance transfer on 1 credit card but miscalculated interest and still owed £9. This was unpaid for 10 months. I could have quite easily paid it off. When I noticed I contacted the credit card company and they eventually agreed to reduce the charges. They refused to remove the defaults and would only remove the fines if I agreed to leave it at that. I agreed at the time and thought I would take the hit on my credit score. I am now looking to sell my flat and buy a property with my partner and discovered the change to my credit score is monumental. It is now 393 which is considered very poor. I admit to being at fault for the unpaid £9 but feel like I am being severely punished. If the credit card company decline to help is it likely the financial obudsman will assist? Does anybody have any advice or experience of this?
Sorry for the long post

Firstly that 393 number means didly squat as no lender ever sees it or uses it, if you didn't pay the £9 for over 10 months and the card went into default then sadly what the lender has reported is factually correct and will stay on your report 6 years.

You can try the ombudsman but they will probably agree that the lender has behaved correctly, as they have a duty to make sure that information provided is factually correct.  Which it seems they have as you have admitted that you didn't pay until 10 months after the debt was defaulted.

Ebe_Scrooge

How did you not notice you still owed £9 on the card ?  You must have received statements.

The default on your file is a true statement of fact, as such it cannot be removed - be thankful that you got some of the fees reimbursed, the card company was under no obligation to do that.  Ignore your score as a lender will neither see nor care about that - but the default will be visible to a lender.  If it's one default on an otherwise unblemished record, and for such a small amount, I suspect it won't seriously hamper your chances of getting a mortgage.  But please don't fret about your score, it's meaningless.

geordie28

Thanks for the replies everyone. From my last thread I can see that it was £12 not £9. Please don't understand me. I do take responsibility but I am worried that this is going to cost me big time. If they do not look at the 'score' what do they look at? It is a quick computerised search is it not? Will they see the amount? Will they not just see a 10 month long default?

waamo

They look at your history not the score. The score is an internal number made up by the credit reference agency. If your history is generally good they go on that. A very small default won't bother most lenders.

Ebe_Scrooge

geordie28 said:

If they do not look at the 'score' what do they look at?

They look at the data contained within your credit file, feed it into their own algorithms, and come up with their own internal score.  Unfortunately their internal scoring criteria are confidential, commercially sensitive, and vary from lender to lender, so you have no way of knowing what they're looking for.  Some lenders will only lend to those with a squeaky-clean record, the majority have a bit of leeway - for example, they may overlook one or two defaults, depending on value and duration.  Pretty much all lenders would walk away from someone who had a whole string of defaults to their name.  From what you've said, I'd be surprised if this one glitch caused you major issues.  If it does turn out to be a problem, you can always try a different lender, or engage a broker - they generally know which lenders would be best for your particular circumstances.

geordie28

Thanks all. Very useful feedback. I was really worried this mistake had undone years and years of good behaviour and it was causing me anxiety. Thanks again

D3xt3r5L4b

One default for the amount of £12 will have little knock on effect.