Moneysavingexpert.com/ Your Credit Rating discussion area

taz121

ricll wrote: »

does getting a loan by itself affect someone's credit rating?

Of course, you are given credit and will reduce your score at first.However should you pay this back without missing payments your score will increase as you will be judged to be a good borrower

taz121

superstar_catwoman wrote: »

Hi Hugoagogo
Its so confusing isnt it?! My partners O/D appears as a debt on his Experian, but mine doesn't!! Could be because he has gone over the authorised limit by accident recently. Its not logical alot of it really. The important thing is we are educating ourselves to try and improve our scores though.

Its great you are taking to steps to imrove your scores.

May i add that it could be that one of the O/D was asked for by yourselves and the other was offered as part of the banks account service.

e.g my Lloyds Gold account gives a £100 free O/D and the Platinum accounts offer a larger one than this.My free O/D does not show as 'debt' even though its used monthly

Stevo09

Hi,

I am new to the site, i have had a look at it over the past couple years, but never took the plunge to join.

I applied for a loan recently as my current car which is on finance has a problem which is going to cost around £1000 to be repaired. I had decided to also swap the car for something a little more economical, after speaking to the Sales person he explained that my car was in negative equity (£1700 ), He told me to volunteraly hand it back as i had paid over 1 half of the finance. I rang the finance company and they said i could do this. Does anyone know how this affects your credit report?

I then thought a personal loan would be better than car finance (certainly looked better value) so i applied for a loan from Tesco, it has been declined on the basis on a low credit score, so i have obtained my credit report from Equifax and it doesnt look good from what i can interpret.

Is there anyone i can speak to about my credit report, and tell me where it is bad and what i can do to improve it.

I am wanting to go for a mortgage within the next 12 months but am now worried i wont get a mortgage.

I am sorry if this post is long, i am just really worried that my car is going to break and i still have to pay for it and cant do anything about changing it or repairing it.

Any help is greatly appreciated.

Thanks

taz121

Stevo09 wrote: »

Hi,

I am new to the site, i have had a look at it over the past couple years, but never took the plunge to join.

I applied for a loan recently as my current car which is on finance has a problem which is going to cost around £1000 to be repaired. I had decided to also swap the car for something a little more economical, after speaking to the Sales person he explained that my car was in negative equity (£1700 ), He told me to volunteraly hand it back as i had paid over 1 half of the finance. I rang the finance company and they said i could do this. Does anyone know how this affects your credit report?

I then thought a personal loan would be better than car finance (certainly looked better value) so i applied for a loan from Tesco, it has been declined on the basis on a low credit score, so i have obtained my credit report from Equifax and it doesnt look good from what i can interpret.

Is there anyone i can speak to about my credit report, and tell me where it is bad and what i can do to improve it.

I am wanting to go for a mortgage within the next 12 months but am now worried i wont get a mortgage.

I am sorry if this post is long, i am just really worried that my car is going to break and i still have to pay for it and cant do anything about changing it or repairing it.

Any help is greatly appreciated.

Thanks

Welcome to the site....

first of all, yes you can hand your car back.I done the same to save myself £300 per month. How i affects your rating will depend upon a few factors. Have you made all your payments on time? if so then you would be regarded as a good borrower and thus have a good impact on your rating. kind of like using your credit card and paying it off within 30 days.

Secondly if you have missed payments then naturally your credit score will suffer, if you then hand it back your lo longer have a debt to pay to the finance company and you should see an increase in your score soon after as the account is 'settled'

Your credit report is for your eyes only, i would not recommed showing it to anyone but use these forums, Experian and even Citizens Advice for help on how to improve it. Remember it can't be changed overnight but you will be amazed at the improvements you can make in a matter of months.

I moved from a very poor 470 to 999 although this took me a couple of years.

Get your report, make sure all data is accurate and you are on the electoral register then set about being smart, sensible and above all PAY ON TIME, not even a day late

edited to add, remember you will get better rates from a loans company than a finance company for a car, BUT you must pay the full amount back plus the interest whereas with the finance company you have discovered that you can hand the car back after half the term. Chances are you will not have the car for 5 years if you take out a 5 year loan and the car will be worth less than what you have still to repay. So at that point you have a choice to make

It really depends on your circumstances

tonyinessex

Hi, first time I have posted on this forum, although I'm a regular on another forum on MSE.

I've got a similar query to the guy above, I have car finance which I took out 17 months ago on a 4 year term, 24%APR . According to my calculations I have paid off about £2100 of the £8000 balance, The car is worth about £6000 now so I am just about liquid on it hopefully.

I earn a fair bit more than I did a year ago so I want to buy a different car for about £10k. I'm thinking a loan would be a better option this time around. My credit score is 650 now and it should increase a bit by the end of the month as I am settling a £110 default I just found from 2 years ago and I am paying off my old phone bill of £200 which was overdue. Other than those the only item on my credit report is the car finance with every payment being on time.

Does the car finance negatively affect how much I could be loaned? Also, I can't sell the car with outstanding finance on it can I? Seems like I'm stuck in a bit of a catch 22. I asked my bank for a quote to see how much they would lend me atm, but they said I have to apply online to get a decision. I don't want to leave footprints on my credit report so am unsure what to do.

jo1972

Hello all,

I'm very confused as I have just got my credit report and credit score which tells me that my score is 900 which is above average. I've always had a bad credit history which I'm gradually sorting over time in view to getting a mortgage soon. But, although my score is 900 I still can't get credit anywhere, for anything

Am I missing something about the credit score? What's the point in having it if it doesn't give an indicator of whether you would be able to get credit or not? I feel it's a catch 22, as because I have now tried on a couple of occasions to get credit and failed, that will now impact my credit score!!

Do different banks/lenders use different credit agencies to obtain credit scores?

Sorry for the long post, it's just really frustrating as I've tried so hard over the past 4 or 5 years to make amends for my wreckless financial past and it doesn't seem to be getting me anywhere.

taz121

jo1972 wrote: »

Hello all,

I'm very confused as I have just got my credit report and credit score which tells me that my score is 900 which is above average. I've always had a bad credit history which I'm gradually sorting over time in view to getting a mortgage soon. But, although my score is 900 I still can't get credit anywhere, for anything

Am I missing something about the credit score? What's the point in having it if it doesn't give an indicator of whether you would be able to get credit or not? I feel it's a catch 22, as because I have now tried on a couple of occasions to get credit and failed, that will now impact my credit score!!

Do different banks/lenders use different credit agencies to obtain credit scores?

Sorry for the long post, it's just really frustrating as I've tried so hard over the past 4 or 5 years to make amends for my wreckless financial past and it doesn't seem to be getting me anywhere.

taken from this site....

Credit ratings are a myth, they don't exist in the UK. Each lender scores you based on its ‘perfect customer’ wish list. This step by step guide’s deliberately mistitled as so many people are under this misapprehension, it’s what they look for.
Get a loan, mortgage, credit card, contract mobile phone or even monthly car insurance and lenders ‘score’ you to predict your likely behaviour. Scoring systems are never published and differ lender to lender, and product to product. So just because one company rejects you, it doesn't automatically mean another will.
Credit scoring doesn't just dictate what products you'll receive, but also how good the ones you actually get are. For example, most loan rates are ‘typical', meaning the APR depends on your credit score; with credit cards, if your score's too low for the sexy deal you wanted, you might get a different product entirely.



There are two big myths to clear up though…

• Credit ‘ratings’ and ‘blacklists’ DON’T exist.
  You DO NOT have a universal credit rating; nor is there a credit blacklist. It mightn't feel like that though, as while each lender scores differently, the information they use is similar. A bad risk for one lender is often a bad risk for others too.
• Lenders aren't obliged to dole out credit.
  Applications are aggregated into millions, and banks prefer to deny a few good quality applicants rather than overspend on personalised vetting procedures or accepting large numbers of unprofitable customers.

Even good risks can be rejected simply because they won't make the bank money!
Banks pick customers for their own good, NOT yours, so the scoring process is about profit not risk. Of course risk plays a part, as those unlikely to repay are a threat to profits. Yet even the most solvent may be rejected if they're unlikely to act in a way that'll make profit for lenders.
The credit crunch has only magnified this. The sooner we understand banks are there to make money, not help us, the better we can play the system
It’s about sophisticated customer weeding
At the high end the whole process is about them picking their perfect customers, and their reasons for rejection can seem bizarre on the outside, but make perfect sense to them. For example…

• Credit card companies may reject you for always repaying cards in full.
  While you feel like the perfect punter, for credit card companies you’re a nightmare. If they can spot this trend, you’re likely to be rejected. The most profitable credit card customers are those who are perpetually in debt, never defaulting, but always managing to meet the minimum repayment.
  Pay off in full every month, don’t use cards enough, or always shift debt to 0% cards, and if they can spot you, they may reject you.

Use ‘expensive’ credit cards.

• If you can't get credit, sadly the solution is apply for hideous 30%-ish rate credit cards offered by the likes of Barclaycard Initial, Capital One Classic, Monument and Aquacard
  
  You can also try the special Smartsearch from comparison site moneysupermarket, which effectively assesses your credit worthiness (a bit like our Credit Checker), then tries to match you up with the best card.
  Importantly, it doesn’t do a credit search, as that itself would hit your credit score. Instead it just asks a few basic credit history questions and works with credit reference agency Equifax to give a rough and ready assessment, followed by indicating ‘suitable cards’.
  To help rebuild your credit rating, you can use these for six to twelve months, spending a little every month. But there is a vital golden rule....
  Strictly repay EVERY month, in FULL, so there's no interest cost.
  After that you should've built a credit history allowing you to move into the mainstream. This tactic is also useful for those who've defaulted in the past.

jo1972

Thank you Taz, that is excellent information and I can't believe I didn't search the site before I posed the question!! :wall:

Cashew

Does anyone use Credit Expert?

I signed up for their free one month trial and had to prove my indentity so sent off my passport and proof of address.

They sent me an email with my pin but whenever I log in I see this message:

We're currently updating our records, so are unable to display your latest credit report at the present time.

So I can't see my report.

Is this just a ruse to make me go over my free month so they can charge me?

Its been like that for over a week now.

Thanks.

Marqueec

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