Peronal Loan and credit rating

th081

They tweak the score to keep you interested in the products they get commission off.

I think a loan in the short term would drop your score further. In terms of a mortgage the company will look at your statements and incoming and outgoing and won't pay any attention to your score apart from checking to see you have not got a big outstanding amount of debt. 

I would just go for a second card to build your file. My score out of interest dropped 76 points to 720 when I took a Currys deal to buy a pixel phone interest free for 12 months. The phone was £300 but they gave a £3500 credit line for future Currys purchases. I know that if I pay the £300 off and close the account it will prob go down further 

So you can't play the credit score number game but just do what you have to make yourself a good person to lend to. Pay back debts on time, have little debt, have savings, stable job, stable financial relationships, married, kids, settled etc

Nasqueron

Your credit score is a gimmick, no lender ever sees it and whether it goes up or down does not affect your chance of getting a mortgage or car finance.

The default and years of missed payments will harm your finance chances, not whether you take a loan then pay it back. 

Apply for another card - it's always helpful to have a Visa or MasterCard alongside an Amex in case Amex goes down, spend an amount every month, say one petrol top-up or a supermarket shop, pay in full every month.

Get a mobile phone contract, even if SIM only and ensure it's paid monthly

Check you are correctly on the electoral register and your history is up to date

Then leave it for a year or so if you can to build up a good credit history

MrFrugalFever

Hi,

Firstly, your missed payment has now transformed in to a default - two very different things! Almost all mainstream mortgage lenders will auto-decline anyone with a default on their file. When are you looking to obtain a mortgage?

Lenders are simply looking to see that you can borrow money and pay it back, on time and if possible in full. 

With a default on your file I think you'd struggle to get a personal loan, if you do it would be at a much higher interest rate due to you being a risk. You may be able to get a secured loan through a car dealer with a reasonable rate but it won't be headline rate.

If you go in to a mortgage application with the car loan they will take the monthly payment and calculate your affordability based on this.

IMO, take out another Credit Card which you can make full use of (as mentioned above maybe utilise TopCashBack etc for application) and spend and pay back in full each month. Do this for 12+ months on both cards and you won't need a loan! Complete eligibility check on lenders own site before applying.

Bigwheels1111

I have a great credit score, If the number is to be believed. 30 years or so, never missed a payment.
But would not get credit from almost everyone.
I earn £76.75 a week. Carers allowance.
But have enough cash to buy a house outright.
Funny old world.

Nasqueron

Bigwheels1111 said:

I have a great credit score, If the number is to be believed. 30 years or so, never missed a payment.
But would not get credit from almost everyone.
I earn £76.75 a week. Carers allowance.
But have enough cash to buy a house outright.
Funny old world.

Credit scores are a gimmick that only you ever see

Lostsoul13

I have few credit cards and just took out a loan everywhere declined me- I pay my credit cards more than minimum payment each month.. I’m thinking the same as you- but paying overpayments. Snoozing a little. As I have enough savings to cover my loan. I want to build credit and improve my score and history.. I’ve just done a balance transfer 14 months %0 and took out a small loan. Nationwide is the only place that accepted me. I just opened an account with them flex direct and gave 1500£ overdraft 0% over 12 months also. I can’t say it would harm your “score” but definitely like minds think alike. Your history will definitely help in a mortgage. That’s my thinking also I’m on long term benefits and they did quote for mortgage with Nationwide’s and they could lend me 80k enough for house around my area. I’m waiting a couple more years to save for bigger deposits … I think repaying and maintaining a good credit history will go in your favour.. least that’s my logic also 

regards 

CliveOfIndia

Lostsoul13 said:

I have few credit cards and just took out a loan everywhere declined me

To reiterate what everyone else has said, taking a loan you don't need purely to increase your meaningless score is madness.  Whilst making loan repayments on time will help your credit history, correct use of a credit card will achieve the same result for zero cost.

Lostsoul13 said:

I pay my credit cards more than minimum payment each month.

To save money, and to maximise a good credit history, you need to be paying your cards in full each month, not just "more than the minimum" - unless you've got a promotional 0% rate.

Lostsoul13 said:

Your history will definitely help in a mortgage.  … I think repaying and maintaining a good credit history will go in your favour.. least that’s my logic also 

It's important to realise the difference between a good credit history and a good credit score.  The score (at least, the score issued by the CRAs) is totally meaningless.  A good credit history, however, is important.  A lender wants to see that you can manage credit responsibly, borrow within your means and always repay what you owe.  To this end, use a credit card for everyday, planned expenses, and always repay it in full every month without fail.  This will mean you pay no interest, and will gradually build up a favourable history.

If you're not repaying your cards in full every month (promotional rates aside), the obvious inference is that you're borrowing more than you can afford - why would any right-minded person choose to pay interest when they don't have to ?