Bank Credit Rating

jtuohy

I was diagnosed with Prostate Cancer a year ago.  I was about to cross to another job and rather stupidly confessed I'd had the diagnosis.  The new company dropped me before I had a chance to sign the contract.  This left me without an income and I had to sign on to the ESA.  I then asked my bank (HSBC) for a 3 month break on paying back a car loan due to my circumstances and to give me time to prepare and recover from the operation.
I have since found new work and paid the outstanding loan off a year before it was due.
I have discovered that the bank reduced my credit limit significantly and as a consequence I have a bad credit rating for the first time in my life.  This can last up to 6 years.  Is there anything I can do to reverse this please?

Brie

As I started to read this I was going to suggest that you sue the company that dropped you as I suspect what they did was illegal - discrimination on some basis.  Of course they might have reversed their decision and taken you on but would you want to work with people like that?  

So we're left with the credit limit and a problem with your credit history.  Unfortunately it's a very real consequence of asking for a break on paying back a loan. 

But assuming that you are ticking along, relatively healthy, working, earning enough and paying your bills there is good news.  First off credit ratings and scores are a marketing thing from various agencies wanting you to pay a monthly fee.  Don't worry about them because banks/lenders don't look at them.  What they want to see is your credit history.  Now your history will show everything your have currently and up to 6 years in the past borrowed money on.  So your car loan, your overdraft, phone contract, monthly car insurance payments.  When these are being paid essentially you have a green light on each one.  If you have a blip on one - like your loan - it will turn yellow and then maybe red.  But the others will stay green.  As you recover and catch up your payments on the loan it goes back to yellow and then green.  And each month the red bits get further and further into the past.  

So yes, things seem a bit off right now but they will improve the longer you keep everything in the green.  What's more a lender/bank will see the blip of red and see that you recovered from it.  Which is a positive thing.  Yes it will take a little while but it's not the end of the world.  Eventually the bank will be happy to increase your credit limit but you might just need to give it a bit more time.

Best of luck with it all!!

jtuohy

 Brie, thank you so much for your kind words and advice.  That is good to know.  I am looking at other banks too and have explained the situation and they seem more empathetic so far.  Like you say it’s not the worse thing in the world.  Thanks again, James x

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