Trying to improve your credit rating from a terrible start 27 September 2022 at 10:20AM edited 27 September 2022 at 10:20AM in Credit file & ratings 10 replies 295 views

jasonwatkins

Apologies if this is more of a stream of consciousness

I fully acknowledge that your credit score in many situations is just an arbitrary number but I'm wondering if I should stop bothering to try and improve mine ?

When I was younger, my money management was abysmal, and that's being generous!.   While I don't have any CCJ's, there are a good few defaults on my file and a lot of debts where I agreed to early settlement amounts as well.

As far as I recall there are also two outstanding debts on file as well that I haven't addressed, but I'm also not being pursued for them either.

I also live on my own and have not worked for a very long time due to various health problems so I am receiving the appropriate benefits for those (UC & PiP).

I've somehow managed to amass 4 credit cards over the past year which I've actively been trying to use to try and improve my credit rating but nothing seems to change.  Some months it stays the same, sometimes it goes down and once in a blue moon it might creep up by a fraction.

But I'm coming to the realisation that, at my age (53), in my situation with no financial ties like family or mortgage, is it really worth be bothering to do anything ?.  I've been debating closing one of the credit card accounts which I've read before that people sometimes don't advise, but I keep thinking that I don't really need four credit cards. 

I've got a Marbles card and Aqua card as two of the others and my usage of those has been good enough that I've had a couple of limit increases on Aqua and one on Marbles that happened fairly quickly.

There's zero chance I'll ever be in a position to buy a property and even less of a chance that I'll ever be given a mortgage and with the lifestyle i lead, I'm also never really going to be in a position to make any large purchases as well.

So should I stop trying ?.   I appreciate this could be a 'how long is a piece of string' question but if you're got a moment to share your thoughts, I'd be grateful.   And please feel free to be brutal as well if need be

Mr.Generous

Just keep doing what you're doing. Spend on cards, pay it off, no need to worry about anything else in your circumstances.

Ebe_Scrooge

I tend to agree with the above.  Just use a credit card for everyday spending, repay in full every month, rinse and repeat.

If you're not likely to need a mortgage or loan in the future, then there's no real need to go all-guns-blazing to repair your credit history.  Having said that, remember that "credit" covers a lot of things - common ones being a mobile phone contract or utility bills.  So as long as you don't go doing anything to create any new black marks on your history, and you're already happy with how you're managing, then I wouldn't go making any changes.

I'd be tempted to keep your cards open, use them in "rotation" if necessary to keep them active (use one of them one month, another the next, etc.).  As long as you can be disciplined enough to only spend what you can afford, of course, and always repay in full every month without fail.  A credit card can be a useful tool - it gives you added protection on purchases between £100 and £30,000, and is often a requirement if you want to book a hotel or hire a car.

jasonwatkins said:

I've actively been trying to use to try and improve my credit rating but nothing seems to change.  Some months it stays the same, sometimes it goes down and once in a blue moon it might creep up by a fraction.

This is the nature of the scores/ratings you see on your CRA reports - they go up and down depending on the weather forecast.  Really, they are just a meaningless marketing gimmick, and bear no relation whatsoever to how a lender will view you.

jasonwatkins

Ebe_Scrooge said:

I tend to agree with the above.  Just use a credit card for everyday spending, repay in full every month, rinse and repeat.

If you're not likely to need a mortgage or loan in the future, then there's no real need to go all-guns-blazing to repair your credit history.  Having said that, remember that "credit" covers a lot of things - common ones being a mobile phone contract or utility bills.  So as long as you don't go doing anything to create any new black marks on your history, and you're already happy with how you're managing, then I wouldn't go making any changes.

I'd be tempted to keep your cards open, use them in "rotation" if necessary to keep them active (use one of them one month, another the next, etc.).  As long as you can be disciplined enough to only spend what you can afford, of course, and always repay in full every month without fail.  A credit card can be a useful tool - it gives you added protection on purchases between £100 and £30,000, and is often a requirement if you want to book a hotel or hire a car.

jasonwatkins said:

I've actively been trying to use to try and improve my credit rating but nothing seems to change.  Some months it stays the same, sometimes it goes down and once in a blue moon it might creep up by a fraction.

This is the nature of the scores/ratings you see on your CRA reports - they go up and down depending on the weather forecast.  Really, they are just a meaningless marketing gimmick, and bear no relation whatsoever to how a lender will view you.

Thankyou.   I do think I'm going to try and move my focus away from the rating because I really don't think it's ever going to matter.  Most of my things that have required a credit search have all been fairly low impact and I've always made sure never to miss a payment and, in the case of services like broadband, leave the account "properly" if i switch providers because I've always felt that it would count in my favour if I ever went back.

I have actually been trying to rotate the cards as well funnily enough.  I think this is partly the reason I was offered a limit increase on the Marbles card after only a few months because it was only a £200 starting limit and I was regularly getting close to that each month with day to day expenses before paying it off.

Certainly food for thought

Ebe_Scrooge

jasonwatkins said:

Ebe_Scrooge said:

I tend to agree with the above.  Just use a credit card for everyday spending, repay in full every month, rinse and repeat.

If you're not likely to need a mortgage or loan in the future, then there's no real need to go all-guns-blazing to repair your credit history.  Having said that, remember that "credit" covers a lot of things - common ones being a mobile phone contract or utility bills.  So as long as you don't go doing anything to create any new black marks on your history, and you're already happy with how you're managing, then I wouldn't go making any changes.

I'd be tempted to keep your cards open, use them in "rotation" if necessary to keep them active (use one of them one month, another the next, etc.).  As long as you can be disciplined enough to only spend what you can afford, of course, and always repay in full every month without fail.  A credit card can be a useful tool - it gives you added protection on purchases between £100 and £30,000, and is often a requirement if you want to book a hotel or hire a car.

jasonwatkins said:

I've actively been trying to use to try and improve my credit rating but nothing seems to change.  Some months it stays the same, sometimes it goes down and once in a blue moon it might creep up by a fraction.

This is the nature of the scores/ratings you see on your CRA reports - they go up and down depending on the weather forecast.  Really, they are just a meaningless marketing gimmick, and bear no relation whatsoever to how a lender will view you.

I have actually been trying to rotate the cards as well funnily enough.  I think this is partly the reason I was offered a limit increase on the Marbles card after only a few months because it was only a £200 starting limit and I was regularly getting close to that each month with day to day expenses before paying it off.

Yep, most cards, especially those with a low initial limit, will gradually offer you limit increases if you use them "properly".  Which means spending on them reasonably regularly and always repaying in full every month without fail.  If you do this, the lender will be - indirectly - making plenty of money from you in terms of the fee that the retailer gets charged by them every time you make a purchase.

Sure, there is an argument to say that if you don't clear the balance then they make even more money because you're paying interest.  But you really don't want to be dong that!  And the card company is quite happy with the steady revenue stream from merchant fees, and no hassle or expense incurred in having to chase you for unpaid debts

MalMonroe

jasonwatkins said:

Apologies if this is more of a stream of consciousness

I fully acknowledge that your credit score in many situations is just an arbitrary number but I'm wondering if I should stop bothering to try and improve mine ?

When I was younger, my money management was abysmal, and that's being generous!.   While I don't have any CCJ's, there are a good few defaults on my file and a lot of debts where I agreed to early settlement amounts as well.

As far as I recall there are also two outstanding debts on file as well that I haven't addressed, but I'm also not being pursued for them either.

I also live on my own and have not worked for a very long time due to various health problems so I am receiving the appropriate benefits for those (UC & PiP).

I've somehow managed to amass 4 credit cards over the past year which I've actively been trying to use to try and improve my credit rating but nothing seems to change.  Some months it stays the same, sometimes it goes down and once in a blue moon it might creep up by a fraction.

But I'm coming to the realisation that, at my age (53), in my situation with no financial ties like family or mortgage, is it really worth be bothering to do anything ?.  I've been debating closing one of the credit card accounts which I've read before that people sometimes don't advise, but I keep thinking that I don't really need four credit cards. 

I've got a Marbles card and Aqua card as two of the others and my usage of those has been good enough that I've had a couple of limit increases on Aqua and one on Marbles that happened fairly quickly.

There's zero chance I'll ever be in a position to buy a property and even less of a chance that I'll ever be given a mortgage and with the lifestyle i lead, I'm also never really going to be in a position to make any large purchases as well.

So should I stop trying ?.   I appreciate this could be a 'how long is a piece of string' question but if you're got a moment to share your thoughts, I'd be grateful.   And please feel free to be brutal as well if need be

Hello!

NO! - please do not stop trying! You have some excellent points in your favour, amongst which are - you are young (yes you are, I'm much older), you don't have any dependants, you have four credit cards, you are good looking, need I go on?

I was in my 60s before I woke up and smelled the coffee in respect of my money matters. And (very) many of us on this forum have been in great financial difficulty, you are certainly not alone in that. I'm starting to think that everyone has highs and lows throughout life - times when they feel well off and times when they don't. I sold my house 16 years ago and am now in a council property - it's not bad though and is in a lovely area with good neighbours but I want to own my own home again. I'm determined, even though I am quite a few years older than you, as I said. Never say never. 

If you DO have some outstanding debts, do you think it might be time to have a look at them? Even if you're not being chased, they're still on your credit file and obviously affecting it. You don't have to do it all at once. 

If you like, you can contact one of the free debt help agencies (even if you don't feel in dire straits right now) just for a bit of advice. They are friendly and best of all, they are non-judgemental. I always do recommend StepChange (and they don't pay me for saying that) because they helped me so much when I was in financial difficulty.

It's a free phone call and you can ignore them, if you so wish. But I found it was so helpful to chat to a stranger who had the ability to advise me and to speak sensibly and knowledgably about finances.

I think it's a good idea to rotate your credit cards and some cards allow you to 'freeze' them for a short time. I have three credit cards but for some reason I always use my Sainsbury's one, which has the lowest limit - and it's never risen, even though I clear the balance every month and have done for the last three years, since they gave it to me. Weird that.  I have 'frozen' the other two temporarily but my total credit limit is £8,500 - more than enough for me. And far too much for me to clear in a month! So I'm better off with the Saino's card for now. 

Good luck, anyway, it's always good to come along and get other people's perspectives. Hopefully mine has helped in some small way. If not, please ignore completely.         But don't give up - that bit don't ignore. 

jasonwatkins

MalMonroe said:

jasonwatkins said:

Apologies if this is more of a stream of consciousness

I fully acknowledge that your credit score in many situations is just an arbitrary number but I'm wondering if I should stop bothering to try and improve mine ?

When I was younger, my money management was abysmal, and that's being generous!.   While I don't have any CCJ's, there are a good few defaults on my file and a lot of debts where I agreed to early settlement amounts as well.

As far as I recall there are also two outstanding debts on file as well that I haven't addressed, but I'm also not being pursued for them either.

I also live on my own and have not worked for a very long time due to various health problems so I am receiving the appropriate benefits for those (UC & PiP).

I've somehow managed to amass 4 credit cards over the past year which I've actively been trying to use to try and improve my credit rating but nothing seems to change.  Some months it stays the same, sometimes it goes down and once in a blue moon it might creep up by a fraction.

But I'm coming to the realisation that, at my age (53), in my situation with no financial ties like family or mortgage, is it really worth be bothering to do anything ?.  I've been debating closing one of the credit card accounts which I've read before that people sometimes don't advise, but I keep thinking that I don't really need four credit cards. 

I've got a Marbles card and Aqua card as two of the others and my usage of those has been good enough that I've had a couple of limit increases on Aqua and one on Marbles that happened fairly quickly.

There's zero chance I'll ever be in a position to buy a property and even less of a chance that I'll ever be given a mortgage and with the lifestyle i lead, I'm also never really going to be in a position to make any large purchases as well.

So should I stop trying ?.   I appreciate this could be a 'how long is a piece of string' question but if you're got a moment to share your thoughts, I'd be grateful.   And please feel free to be brutal as well if need be

Hello!

NO! - please do not stop trying! You have some excellent points in your favour, amongst which are - you are young (yes you are, I'm much older), you don't have any dependants, you have four credit cards, you are good looking, need I go on?

I was in my 60s before I woke up and smelled the coffee in respect of my money matters. And (very) many of us on this forum have been in great financial difficulty, you are certainly not alone in that. I'm starting to think that everyone has highs and lows throughout life - times when they feel well off and times when they don't. I sold my house 16 years ago and am now in a council property - it's not bad though and is in a lovely area with good neighbours but I want to own my own home again. I'm determined, even though I am quite a few years older than you, as I said. Never say never. 

If you DO have some outstanding debts, do you think it might be time to have a look at them? Even if you're not being chased, they're still on your credit file and obviously affecting it. You don't have to do it all at once. 

If you like, you can contact one of the free debt help agencies (even if you don't feel in dire straits right now) just for a bit of advice. They are friendly and best of all, they are non-judgemental. I always do recommend StepChange (and they don't pay me for saying that) because they helped me so much when I was in financial difficulty.

It's a free phone call and you can ignore them, if you so wish. But I found it was so helpful to chat to a stranger who had the ability to advise me and to speak sensibly and knowledgably about finances.

I think it's a good idea to rotate your credit cards and some cards allow you to 'freeze' them for a short time. I have three credit cards but for some reason I always use my Sainsbury's one, which has the lowest limit - and it's never risen, even though I clear the balance every month and have done for the last three years, since they gave it to me. Weird that.  I have 'frozen' the other two temporarily but my total credit limit is £8,500 - more than enough for me. And far too much for me to clear in a month! So I'm better off with the Saino's card for now. 

Good luck, anyway, it's always good to come along and get other people's perspectives. Hopefully mine has helped in some small way. If not, please ignore completely.         But don't give up - that bit don't ignore. 

Apologies for the late reply.   Had a bit of a funny reaction to my Covid booster, but that's another story

Thankyou for the post and the advice.   I've certainly considered approaching these two debts that are outstanding but I've also thought that if I waited them out long enough then I might actually get an early settlement offer that's low enough that I could afford.

Considering I've gained these 4 credit cards in the past 12 months and these debts are years old, I can't say it's affecting me all that much credit file-wise, so I don't think it's going to hurt to wait it out a bit longer to see if I do get settlement offers.

I've used StepChange in the past and I do agree that they are excellent, but I don't think I'd really need to do that this time with only two debts.

I might have to see if I can find out how to do a detailed search of my credit file again.  I remember doing it with one particular website a while ago and it actually gave me exact dates of the defaults and when they would fall off my file, so maybe if those are only a year or two away from clearing then that might be enough of an incentive to actually do something.

MovingForwards

Clearscore
Credit karma
MSE credit club 

To see your credit reports.

Defaults drop off 6 years after they went on.
AP / AR markers are 6 years after the debt was settled.

jasonwatkins

MovingForwards said:

Clearscore
Credit karma
MSE credit club 

To see your credit reports.

Defaults drop off 6 years after they went on.
AP / AR markers are 6 years after the debt was settled.

Thankyou, but the credit report I got some years back wasn't from any of those sites.

It was very detailed and, as I said, contained all the various dates of the credit agreements so I could see clearly when the defaults would drop off.

It might possibly have been with Equifax themselves now I think about it.  I might have to have a look.

MovingForwards

You can get your statutory reports from Equifax, TransUnion and Experian.

Not all financial institutions report to all of them, some only report to one or two CRAs.

Also, if you had a lot of accounts previously they would have been more detailed. When things have fallen off due to age, they will no longer show as unless the account is still open or has an AP /AR marker they drop off after 6 years, same as CCJs or when an account has defaulted.

It's possible there now isn't much information on them.

jasonwatkins

MovingForwards said:

You can get your statutory reports from Equifax, TransUnion and Experian.

Not all financial institutions report to all of them, some only report to one or two CRAs.

Also, if you had a lot of accounts previously they would have been more detailed. When things have fallen off due to age, they will no longer show as unless the account is still open or has an AP /AR marker they drop off after 6 years, same as CCJs or when an account has defaulted.

It's possible there now isn't much information on them.

Thanks for the tip.   I've just downloaded my statutory report from Equifax and it's making for interesting reading.  All 93 pages of it !!

So far, most of my defaults have at least another 2 years before they drop off so it's not exactly filling me with a lot of enthusiasm, but I'll keep reading though.