Got a very poor rating on Experian credit score report

Messiah9

Hi,

I moved to UK in 2017 on a work visa. I have been living here since then as a tenant in a flat. I am full-time employed and bank with HSBC.

Since credit score reports require at least 3 years of residential history, I was only recently able to request a credit report for myself.

I used Experian to find the report and it gave me a score of 505 out of 999. This is a worrying situation for me because recently my application to open a new account with another bank was rejected after they performed a credit check on me.

I registered for Credit Expert on Experian where it shows more details. Below are results. I have highlighted the relevant parts in bold.

Your outstanding balance = Low risk
Making your payments = Low risk
Your financial activity = Low risk
Managing your credit = Low risk
Your account history = Moderate risk
Average account age for me = 3 years
Your residential information = High Risk
Electoral roll = Unregistered
Age of mortgage = N/A
Adverse events = High Risk
Time since last default = 1 year 10 months

Questions:

1. I am not a citizen of UK. Also I do not own the house where I live because I am a tenant. Can I still register for an electoral roll? And how much will this help to improve my credit score?

2. It says there was one adverse event and the time since last default is 1 year and 10 months. I checked and this was related to a mobile provider. I paid all the due amount. Now is there anything I can do to change the impact of it or I just need to give it time to reduce the impact?

Thanks.

sourcrates

As always, don`t pay too much attention to the score, its credit history that counts, start off small, pay monthly sim card or similar, history builds over time.

Messiah9

sourcrates said:

As always, don`t pay too much attention to the score, its credit history that counts, start off small, pay monthly sim card or similar, history builds over time.

Thanks for your response.
Wouldn't they check my credit score to grant me a mobile contract? I remember applying for a mobile contract a few years ago with Vodafone and they rejected it without any specific reason given.
As I understand, you are suggesting to get a mobile contract and pay the mobile bills monthly on time.
Also, if my credit score does not count then I wonder why my application was rejected by Natwest bank. Their response was
"When we were processing your request, we carried out standard checks as described in the ‘Information’ section in the terms and conditions of the application. These checks are done with Credit Reference Agencies such as Equifax, Experian and Fraud Prevention Agencies such as CIFAS. Following these checks, we are unable to open an account for you.

We are unable to discuss any further rationale for this, and are sorry for any inconvenience this may cause. If you would like to appeal this decision and have further information you would like us to consider, you can contact us via e-mail at avureview@natwest.com."
Other than one default entry for mobile bill in my credit report, everything else is good.

sonofmerton

Messiah9 said:

sourcrates said:

As always, don`t pay too much attention to the score, its credit history that counts, start off small, pay monthly sim card or similar, history builds over time.

Wouldn't they check my credit score to grant me a mobile contract? I remember applying for a mobile contract a few years ago with Vodafone and they rejected it without any specific reason given.
Also, if my credit score does not count then I wonder why my application was rejected by Natwest bank.  

only you see your 'credit score'. natwest see how much you owe, how many defaults you have had. they may also have the benefit of knowing how much you earn etc.

any 'score' they may use would be used internally to assess you, but it could be out of a hundred or even 212 depending on what algorithm they use. some banks scoring could also cover other outside influences such as how many debtors they have in your area already. banks aren't legally required to say why they turn you down though. 

if you signed up with other agencies you will usually get a different score. mine vary widely. they are a gimmick. no bank or financial institution ever sees it. even if you showed them, it would bear no influence on their decision either way.   
 

[Deleted User]

Credit scores should always be ignored, they're nothing more than a novelty gimmick intended to encourage you to pay the CRAs to improve the score that they themselves generate.

No lender will EVER see your credit score. No decision on whether you get credit or not will EVER be based on your credit score. When you apply for credit, lenders request information from one or more of the three main CRAs (Equifax, Experian, TransUnion), that information is your credit record / history - all the debt you have, current available credit, payment history, any adverse factors like late payments, defaults etc. They use your salary information and all this data in their own scoring system (which you will never see, to stop you gaming the system) and decide to lend, or not, based on what their system says. The CRAs do not know your salary and they do not lend to you thus what they score you is irrelevant.

Natwest rejected you because you didn't meet their risk or lending profile, not because of the score as no-one but you ever sees it.

Your chance of getting credit is lower because of the default (effect will lessen over time), because you are not registered on the electoral role (I appreciate you may not be allowed to but it is a factor regardless), because you have limited credit history due to the time you have been here.

You would do better trying for a basic SIM only mobile contract (more likely to be accepted as it's not tied to a debt like having a contract mobile is) and a basic credit builder card from someone like Vanquish or Capital One who tend to be more flexible on poor credit history (so long as you pay the debts in full every month the interest rate is irrelevant)

MalMonroe

Messiah9 said:

Hi,

I moved to UK in 2017 on a work visa. I have been living here since then as a tenant in a flat. I am full-time employed and bank with HSBC.

Since credit score reports require at least 3 years of residential history, I was only recently able to request a credit report for myself.

I used Experian to find the report and it gave me a score of 505 out of 999. This is a worrying situation for me because recently my application to open a new account with another bank was rejected after they performed a credit check on me.

I registered for Credit Expert on Experian where it shows more details. Below are results. I have highlighted the relevant parts in bold.

Your outstanding balance = Low risk
Making your payments = Low risk
Your financial activity = Low risk
Managing your credit = Low risk
Your account history = Moderate risk
Average account age for me = 3 years
Your residential information = High Risk
Electoral roll = Unregistered
Age of mortgage = N/A
Adverse events = High Risk
Time since last default = 1 year 10 months

Questions:

1. I am not a citizen of UK. Also I do not own the house where I live because I am a tenant. Can I still register for an electoral roll? And how much will this help to improve my credit score?

2. It says there was one adverse event and the time since last default is 1 year and 10 months. I checked and this was related to a mobile provider. I paid all the due amount. Now is there anything I can do to change the impact of it or I just need to give it time to reduce the impact?

Thanks.

You can register to be on the electoral roll if you have permission to remain in this country, and as you have a full time job, I'm assuming that is the case. Information in this link : https://www.gov.uk/register-to-vote
Register to vote and you will then be on the electoral register. You should also be completing, or have completed the census form which will have been posted to your property, that's due by tomorrow, 21 March.

You know what? My Equifax credit score has just (apparently) plummeted by 19 points and I have decided to just ignore the whole thing. As anyone on this forum will tell you, your credit score is something only you will see, lenders are only interested in your credit history. 

If you are on the electoral roll, lenders will see that and it is a definite plus in your favour.

Your report is showing 'high risk' for your residential info because you're not on the roll and could run off at any time for all we know.

If there is anything on any of your credit reports that you don't agree with, you can ask for a note to be put on stating that fact, while you query it with the lender or lenders who put it on there. If there are any errors or queries, you are expected to sort them out with the lenders first. 

I would definitely ask that mobile provider to remove that default notice if it's all paid off. Or ask them why they won't remove it if that is the case.

sourcrates

You cannot have a default removed, paid or otherwise, unless it was incorrectly added in the first place.

It will stay for 6 years now regardless, however the passing of time will lessen its effects on you.

cymruchris

Based on your very thin credit file, and your current inability to get some of the basics, I would suggest you take a look at Loqbox  - it's reported as a loan - but it's actually you saving money. It's a 12 month period - at the beginning you choose a figure that you can comfortably save every month, remembering that you can't touch it for 12 months.

So let's say you pick a monthly savings figure of £100 - 12 months = 12x£100 payments - £1200. So at the beginning on paper - you take out an interest free loan for £1200 (you don't actually get the money) - and then you pay it back each month with your £100 payment. At the end of the 12 months you can open a current account with TSB for no fee - and you get to keep every penny of your £1200. The 'loan' is reported to the credit agencies (your score usually drops initially) and it becomes one of your regularly reported monthly payments on each of the credit reference agencies. 

Once you reach 12 months - you'll have a fully settled, well managed credit account on all of your history files which is a positive indicator to other institutions that you are a better candidate for credit, and £1200 in a new TSB current account. 

One of your challenges of course is that you're on a work visa rather than an unlimited leave to remain visa - so in effect that visa expires every so often, and you're not guaranteed another one, and for that reason alone I'm sure you'll find it more difficult to get long term credit.