Moneysavingexpert.com/ Your Credit Rating discussion area

RexBanner

Hi folks,

I want to get a personal loan of approx 10k to pay off my credit cards and overdraft, and am starting to sort out my credit rating in advance of applying. I've recently received a cheque for £1200 that has brought me back into the black on my current a/c - would it make any difference if I used this cash to clear a credit card (and consequently go well into my agreed overdraft again - currently £1,800) or is this likely to not make a difference as I wouldn't be any less 'in debt' than before?#

Also, my bank seem keen to lend to me as it flashes up that I have been 'pre-selected' for a loan of up to 13k at 9.8% every time I log-in to my a/c. This would do me fine - but are they likely to throw a much higher interest rate at me when I apply (few missed payments in the past, but no defaults or CCJs).

Any help much appreciated.

louise56489

If you clear the balance on a credit card, this should improve your credit rating and score. You may find that the credit card company offers an increase on your borrowing amount.

slg_sue

Hi, sorry another new user here. I am trying to find out exactly what lenders see when they view your credit report.
I do have a few defaults but what I actually want to know is do they see the names of companys I have my default with or is it just that I have a default?
There is a particular default that worries me as I want to apply for similar credit - defaulted on this in 2006 and the current balance is £43, will the lender who I want credit from be able to see who I owe this money to?

Cashew

I've just got access to my credit expert report.

I have only entered my last two address (last two years) but I see I am linked to many more.

Should I also enter those linked addresses (where I have lived previously) to get a better picture?

Also I am not on the electoral roll. Will this hinder my applications?

Also again, it says I am using 95% of the credit available to me. If I applied for a bigger overdraft and did not use it this would show I was using less of the credit available to me. Would this give me a higher score with lenders?

Thanks.

thriftymomma

Getting on the electoral role will definitely help.

annieadvisor

Can I just bring to everyones attention that the three credit reference agencies will give you a report for free as long as you are authorising CAB or other money advice agencies for the purpose of applying for the new Debt Relief Order

thanks

Gumption_Brash

Cashew wrote: »

I've just got access to my credit expert report.

I have only entered my last two address (last two years) but I see I am linked to many more.

Should I also enter those linked addresses (where I have lived previously) to get a better picture?

Also I am not on the electoral roll. Will this hinder my applications?

Also again, it says I am using 95% of the credit available to me. If I applied for a bigger overdraft and did not use it this would show I was using less of the credit available to me. Would this give me a higher score with lenders?

Thanks.

-With the linked addresses, I wouldn't worry too much unless it shows that you have a debt/fraud or CCJ in conjunction with it. *shrugs* Otherwise it shouldn't have any bearing.

-These days, being on the electoral roll is pretty much a necessity. It basically confirms where you are living for the lenders. With Experian it's not too much of a hindrance, but with Equifax, if your not on the roll then your credit score can be very low.

If for some reason you don't want to be on the electoral roll (political reasons? *shrugs*) you can add a note to that part of your file, stating that you can provide confirmation of address upon request. (With bills etc)

OR:

Write to the lender and supply said evidence in accordance with your application. This means it will take longer, but should at least partially negate the need for you to be on the roll.

-Having an amount of 'available credit', in my experience, has been a hindrance to my credit score. Lenders like things to be simple. Having a fluctuating balance of funds available make it harder for them to guage your status. I have never heard of an overdraft turning up on a credit report but this is certainly true of credit cards. Even with a small balance.

Opening a credit card account can be good for long term credit scoring, but short term you will lose more credit points than a loan for more money.

-At least that's what happened to me.:cool:

Cashew

Gumption_Brash wrote: »

Opening a credit card account can be good for long term credit scoring, but short term you will lose more credit points than a loan for more money.

I applied for a Capital One card so I could do a balance transfer but they said no but said I could have a Capital One Platinum card.

I don't want it as it doesnt have 0% balance transfer but am thinking I might sign up for it, bin the card (so I dont spend) and it will look good on my report.

Do you think I will 'lose more credit points' doing this?

Gumption_Brash

Cashew wrote: »

I applied for a Capital One card so I could do a balance transfer but they said no but said I could have a Capital One Platinum card.

I don't want it as it doesnt have 0% balance transfer but am thinking I might sign up for it, bin the card (so I dont spend) and it will look good on my report.

Do you think I will 'lose more credit points' doing this?

Hmmm. Simply having the account, and not spending on it will not improve your credit rating. If however you use it and keep up payments, and do this for about a year then it will have great benefits to your credit rating.

That's what I mean about long term gains and short term pains. Credit card for a few months (even if you do everything right) will hit your credit rating. Keep it up though and, eventually, you will reap the rewards.

My advice is to go for a pre-paid card - check Martin Lewis's advice on building credit- you get all the benefits of a credit card minus the debt (you put in whatever amount of money you want to spend and only pay a small fee for the pleasure) Use that and you won't have to worry about paying a minimum and it will have just as good an impact on your credit history. Plus your available balance won't fluctuate either, which is good for your report.

For what its worth...

Cashew

Gumption_Brash wrote: »

Simply having the account, and not spending on it will not improve your credit rating..

On my credit report it says how much of the credit available to me I am using in a precentage.

If I got this credit card and did not use it wouldnt that mean I would have more credit available to me and the % I am using would then be lower?

Or do they not look at this value?

I will look into the prepay. Would be good to not be able to go over my limit.