Credit rating drop and can't get a phone

parkerd68

Hi everyone. First time here so please be gentle! My wife and I were struggling financially up until early this year, yet were still able to get things like mobile phones and cars (with decent APRs). We sold our house, cleared our debts and are temporarily renting (at least a year) with a healthy deposit in the bank for another house. Now my credit score has dropped on apps, I'm struggling to get credit for a car, and I've just been turned down for a new phone. I'm sure this is a common thing, but can someone please explain why this is happening, and is there anything I can do to help my situation? Many thanks in advance.

Hoenir

Time heals as they say. If you've previously had issues. Then providers of credit will have their own internal policies as to when they'll be prepared to provide facilities again. A case of once bitten twice shy. 

parkerd68

Hoenir said:

Time heals as they say. If you've previously had issues. Then providers of credit will have their own internal policies as to when they'll be prepared to provide facilities again. A case of once bitten twice shy. 

I guess so. I hadn't had bad credit (defaults etc) for about 6 years. I was paying on time, but had just built up the debt. That's why I can't understand the change. 

MattMattMattUK

parkerd68 said:

Hi everyone. First time here so please be gentle! My wife and I were struggling financially up until early this year, yet were still able to get things like mobile phones and cars (with decent APRs). We sold our house, cleared our debts and are temporarily renting (at least a year) with a healthy deposit in the bank for another house. Now my credit score has dropped on apps, I'm struggling to get credit for a car, and I've just been turned down for a new phone. I'm sure this is a common thing, but can someone please explain why this is happening, and is there anything I can do to help my situation? Many thanks in advance.

It might be worth doing a bit of forward planning, but committing to a car on finance ahead of getting a mortgage and buying a home is probably not the best course of action. You would be better buying a cheaper car using a small amount of your deposit and having zero debt when you come to buy a car. 

When you say turned down for a new phone, do you mean refused a contract, or do you mean trying to buy a £1k+ phone on finance as well as a new contract? The MSE thing to do would be to buy the phone outright and just get a SIM only deal, far cheaper over the five year life of the phone, or if your existing phone is serviceable then just continue to use that on a SIM only deal. 

parkerd68 said:

Hoenir said:

Time heals as they say. If you've previously had issues. Then providers of credit will have their own internal policies as to when they'll be prepared to provide facilities again. A case of once bitten twice shy. 

I guess so. I hadn't had bad credit (defaults etc) for about 6 years. I was paying on time, but had just built up the debt. That's why I can't understand the change. 

Your "score" is a meaningless number made up for marketing purposes, all lenders will score you internally based on their own metrics. Things such as a recent change of address can be a factor (within the last year particularly), you are also no longer a homeowner so that also factors in. Lenders cannot see your savings, nor are they factored in in any way. Bad debts are just one factor and can be a huge negative, but things like time in address, electoral roll, other financial commitments, having a mortgage etc. all factor in. 

CliveOfIndia

Ignore your score, it's a meaningless marketing gimmick.  It's not used, nor even seen, by any lender.

parkerd68 said:

We sold our house, cleared our debts

For what it's worth, this will be the reason for your score dropping.  It drops in response to any change in your credit circumstances, whether good or bad.  But, to reiterate, the score itself has no bearing whatsoever on your ability to get credit.

It's worth checking all 3 of your credit files, just to see what negative markers (if any) are present.  But if you've only relatively recently recovered from some financial hardship, it's likely to be a case of just giving it some time.

In the meantime, I must agree with the previous poster - it would be far more prudent to buy a cheaper car and phone outright (or, even better, keep what you've already got).  I personally reckon that's a sensible approach in any circumstances, perhaps even more so if you're looking to buy a house in the near future.

Nebulous2

Have you changed all your accounts to match? Are you on the electoral roll at your new address?

Is the updated address showing consistently with the CRAs? 

Changing address can confuse the system a bit but once all the ducks are lined up your chances should improve quickly. 

Whether you should be taking credit is a different question however, which others have already addressed.