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    • lizferris1984
    • By lizferris1984 23rd Feb 19, 8:50 PM
    • 71Posts
    • 17Thanks
    lizferris1984
    Why is my score this low? Please help!
    • #1
    • 23rd Feb 19, 8:50 PM
    Why is my score this low? Please help! 23rd Feb 19 at 8:50 PM
    Hi everyone,

    Just joined the MSE forum so I can get these concerns off my chest and see if anyone can help me! I have joined credit club, read advice on various websites. But I'm still baffled by my situation.

    I completely expect my score to be below average but it's way worse than this and keeps getting lower! I have no idea why!

    My score is almost as low as it can get. I have no CCJs or bankruptcies. I have 2 defaults (a couple of years old) - I am making regular payments on both defaulted accounts. I have no other unpaid debts besides these.

    Credit utilisation shows as the only issue on MSE credit club (I have good or ok marks on all other scoring areas). I found out a week ago, I had a credit card account still open that I thought was closed years ago. It was on a payment freeze (zero interest). Only found this out when I contacted the credit provider. I now have a new credit card for the account, and I am in process of clearing the balance.

    Since my defaults I've been accepted for a Very catalogue account and an O2 phone contract. I've also had a current account upgrade. I am employed, my debt to income ratio shows as good, I have had no missed payments in at least the past 3 years. My total debts amount to less than 1500 and my active credit limit is 675 of which I am using 60%. Making payments to lower this currently - most of it is on the credit card I thought was a closed account.

    I would expect my score to be below average. However I've recently been rejected for a current account switch (!!) & a balance transfer card specifically advertised for those with poor credit. I was also declined for 100 overdraft from my bank, they suggested I apply for the overdraft - I didn't ask for it. I am employed and have had zero issues with account management. And yet it was declined. Have never had any bounced payments and never been unauthorised overdrawn.

    I want to build credit for a house purchase - I am in the early stages of saving for a deposit & getting my budget in order to enable maximum savings.

    I have friends who have had defaults and they say they could still get credit with defaults showing, and it definitely didn't affect any bank account switches or overdraft applications. I also have a friend who is long term unemployed and yet he gets approved for overdrafts and credit cards. I'm starting to feel like Experian/Equifax think I'm someone I'm not!

    I am starting to feel very upset by this & feel like my best efforts are failing. What am I missing here? Is it normal to be refused basic banking facilities if you have defaults? Why is my score so incredibly low when cedit club says I'm good all areas besides the utilisation?

    Look forward to any insights that could help me,

    Liz
    Last edited by lizferris1984; 25-02-2019 at 10:01 PM.
Page 3
    • lizferris1984
    • By lizferris1984 24th Feb 19, 2:37 PM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    I defaulted on a few accounts back in 2009. Also due to illness (I was out of action for a while). The way you are viewed by lenders will gradually improve over the next 4 years. Just make sure you on the ER. Keep up to date with all your bills and utilities. Get a SIM-only rolling contract for the mobile. Use your credit card for your groceries and pay off the balance in full each month. And continually check your three credit files for accuracy. So no, it is not futile. (The major improvement will only come in four years though)
    Originally posted by Willing2Learn
    Thanks - I already have a phone contract which includes a handset, so that's all fine. I haven't had any missed payments in over 3 years on anything. Good advice about grocery payments.

    What is ER?
    • Willing2Learn
    • By Willing2Learn 24th Feb 19, 3:04 PM
    • 4,760 Posts
    • 4,305 Thanks
    Willing2Learn
    ER = Electoral Register. It is vital to have your ER at your current address. When you check your credit files, your ER should be listed on it, so that a lender can see it when they check...
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • lizferris1984
    • By lizferris1984 24th Feb 19, 5:19 PM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    ER = Electoral Register. It is vital to have your ER at your current address. When you check your credit files, your ER should be listed on it, so that a lender can see it when they check...
    Originally posted by Willing2Learn
    Thanks. I'm already on the electoral roll, always have been. So that's all sorted!
    • Willing2Learn
    • By Willing2Learn 24th Feb 19, 5:39 PM
    • 4,760 Posts
    • 4,305 Thanks
    Willing2Learn
    Thanks. I'm already on the electoral roll, always have been. So that's all sorted!
    Originally posted by lizferris1984
    And you've checked that your ER is correctly listed on your three credit files yeah?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • lizferris1984
    • By lizferris1984 24th Feb 19, 8:07 PM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    My word - you’re STILL focussing on the score.

    Please - stop - otherwise you’ll become obsessed with numbers that have no real world bearing.

    You are the ideal target market for the CRA’s by making you believe your score means something and then buying into products to “increase” it.

    The score only exists to sell you improvement products such as Loqbox and others that I won’t mention in fear you’d end up applying for them.

    Regards the defaults - a default is a black mark for the 6 years it’s on there, however a settled default does of course look marginally better than one that is outstanding or unsettled.

    You need to focus on bringing down any current debts.

    On that note - can you provide any information on your current situation - current debts, salary, current available credit etc
    Originally posted by Gary_Dexter
    Ok - so much as you irritated me at first, I think I am starting to get it. About the score not being important. So thanks for being honest.

    I had a phone conversation just now - turns out this friend of mine who "had defaults but could still get credit", earns just 500 per month (part time, rest is tax credits) and owes 13,000 to creditors. She says she's paying 450 a month & then obviously spending it again, in the same month.

    So, she really has a "very good credit score". But is probably just about get an IVA.

    So I guess your point is, it's possible to have a "good score" and be making incredibly stupid financial decisions. Is that correct?

    Because my score is very poor, and hers is very good, but she is clearly in a way bigger mess than me.
    Last edited by lizferris1984; 24-02-2019 at 8:21 PM.
    • lizferris1984
    • By lizferris1984 24th Feb 19, 8:20 PM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    And you've checked that your ER is correctly listed on your three credit files yeah?
    Originally posted by Willing2Learn
    It's down for all 3 addresses past 5 years on Clearscore, and is on Noddle. That's all I'm aware of...
    • macman
    • By macman 25th Feb 19, 9:13 AM
    • 43,573 Posts
    • 18,708 Thanks
    macman
    It's your credit history that lenders look at, not the made-up score. The example of your high-scoring friend demonstrates the irrelevance of credit scores.
    The reason for your defaults is not known by lenders. They are relatively recent, and, if you apply for a mortgage, you will be competing against people with no defaults and no late payments. Who would you rather lend to?
    It's not about income, it's about what your history shows about your ability to take credit and repay it reliably on time. That's where your problem is, and only time will solve it. In the meantime, keep up your current clean record.
    No free lunch, and no free laptop
    • lizferris1984
    • By lizferris1984 25th Feb 19, 9:46 PM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    It's your credit history that lenders look at, not the made-up score. The example of your high-scoring friend demonstrates the irrelevance of credit scores.
    The reason for your defaults is not known by lenders. They are relatively recent, and, if you apply for a mortgage, you will be competing against people with no defaults and no late payments. Who would you rather lend to?
    It's not about income, it's about what your history shows about your ability to take credit and repay it reliably on time. That's where your problem is, and only time will solve it. In the meantime, keep up your current clean record.
    Originally posted by macman
    Thanks! That's right the reasons aren't known for previous poor record. Fortunately I know the reasons though, and can learn from it.

    I am not planning to apply for a mortgage for at least 6 years. At the moment I'm focusing on saving money and getting my finances in order generally. This includes credit report, but not limited to. Very fortunately for me I'm looking at a small mortgage because most of my house purchase is being funded in cash - through inheritance & my own savings. So it will be a 50% deposit situation, rather than a 5 - 10%.

    I realised that myself about my friend, that's why I posted about it. She gets offered credit all the time - but only credit cards. I guess that's not at all the same as if she applied for a mortgage, or finance for a car, for example. I understand what people are saying about different lenders looking for different things.

    Makes complete sense & has been very educational.

    I think the assumption here from everyone has been that I don't have any money, and that's actually not true. Yes my credit record is bad at the moment, but surely a 75k deposit is reasonable when I do apply for a mortgage?

    I thought a cash deposit would make some difference when coupled with an acceptable credit record.
    Last edited by lizferris1984; 26-02-2019 at 12:18 AM.
    • lizferris1984
    • By lizferris1984 26th Feb 19, 11:03 AM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    Just to add to this thread - to clarify I don't have any AP markers on my credit report. I have checked everywhere. The credit card shows as paid on time every month, while it was on payment freeze. I thought I might have seen them, but no, they are not there.
    • MallyGirl
    • By MallyGirl 26th Feb 19, 11:40 AM
    • 4,071 Posts
    • 9,508 Thanks
    MallyGirl
    Make sure you are checking all 3 CRAs (especially if you think you saw APs). Not every lender reports to every CRA so there might be things on one report that aren't on the others.

    You can have a really good score by never having had any credit and therefore never having done anything wrong. That does not mean you will be appealing to lenders. It is all about your actions and your credit history.
    • lizferris1984
    • By lizferris1984 26th Feb 19, 7:09 PM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    Make sure you are checking all 3 CRAs (especially if you think you saw APs). Not every lender reports to every CRA so there might be things on one report that aren't on the others.

    You can have a really good score by never having had any credit and therefore never having done anything wrong. That does not mean you will be appealing to lenders. It is all about your actions and your credit history.
    Originally posted by MallyGirl
    Am I right in thinking the big 3 are Experian, Equifax and Callcredit? I currently use Clearscore and Noddle - are they Experian and Callcredit platforms?

    And ok - I didn't know that little credit history could give you a good score! The idea I've heard most commonly, is that it gives you a bad/low score. Is that not always the case?
    • zx81
    • By zx81 26th Feb 19, 7:16 PM
    • 24,383 Posts
    • 27,182 Thanks
    zx81
    Not always.

    Credit scores, especially Experian's, punish change, As a result, 18 years old and bankrupts can score highly, as they don't have any active credit.

    Paying off your debts, on the other hand, and therefore reducing your risk, lowers your score.

    So the ideal Experian customer is an 18 year old bankrupt who never pays off their debts. There's one or two lenders who disagree with that...
    • lizferris1984
    • By lizferris1984 12th Mar 19, 2:59 AM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    Hi everyone - just wanted to add an update here because progress has been made!

    I paid one of my defaults (200) with the debt collector. I have re-activated my credit card account and have paid the balance in full. So I now have 0 balance on that card. This is my only credit card, I plan to use it for groceries as someone suggested here, and pay in full each month.

    Turns out I didn't have any AP markers - I got that wrong. Credit card was showing as paid up to date, just maxed out on the balance until I paid it off.

    I updated my preferences on the electoral roll - I have opted back in to the open register. Not sure if this makes a difference or not, but have changed it just in case.

    I was also accepted for a small personal loan (just 500) which I used to pay the credit card balance & part of my other default. Repayments are easily affordable, and should also help my credit report repaying this.

    I am now left with remainder of my other default still to pay. Credit utlization has decreased & despite a few declined applications have been accepted for the small loan. I obviously won't make any more applications now for another year at least. Date is marked in my diary.

    I know I may be told off for saying this (!) but Experian score has gone up by 70 points.

    Thank you to everyone for your help/advice.
    Last edited by lizferris1984; 12-03-2019 at 3:07 AM.
    • Ben8282
    • By Ben8282 12th Mar 19, 3:04 AM
    • 4,377 Posts
    • 2,409 Thanks
    Ben8282
    Forget the meaningless score.
    However, consider the information on your credit files and ask yourself honestly what sort of risk lenders may think you pose.
    • lizferris1984
    • By lizferris1984 12th Mar 19, 3:05 AM
    • 71 Posts
    • 17 Thanks
    lizferris1984
    Forget the meaningless score.
    However, consider the information on your credit files and ask yourself honestly what sort of risk lenders may think you pose.
    Originally posted by Ben8282
    See post above - just added this now. I think I've made some good steps forward in the past few weeks. Not sure if other forum users will agree or not, but I'm happy with the result for sure.
    • Ben8282
    • By Ben8282 12th Mar 19, 3:48 AM
    • 4,377 Posts
    • 2,409 Thanks
    Ben8282
    Yes you have made progress. But with 75K saved up as a house deposit why ever did you take out a loan for 500! You commented in an earlier post that people on the forum has assumed that you don't have money which was not correct. I am not questioning whether you do or don't have money. But what you have done is a) demonstrate that you were unable to repay your quite small debts without further borrowing and b) that your financial situation was such that you needed to take out a loan for as small a sum as 500 at, I would imagine, a quite high APR. I hope that you didn't use a payday loan company.
    You have actually only repaid the 200 default with your own money. You have borrowed to settle the credit card and part of the second default and the remainder of the second default remains unpaid.
    How does someone with 75K in savings default for such small amounts and have to borrow to repay such small amounts?
    What were the declined applications for? Why did you make them? This really does make you look desperate for credit.
    Again I can ask the question. A potential lender will have no knowledge of any savings. What sort of impression as to your finances will be gained from the current situation?
    Last edited by Ben8282; 12-03-2019 at 3:51 AM.
    • Gary_Dexter
    • By Gary_Dexter 12th Mar 19, 7:36 AM
    • 6,988 Posts
    • 4,647 Thanks
    Gary_Dexter
    As above not sure why you took out the loan with that much aside in savings.

    And loans in credit report will make a lender question why you can’t get by day to day without a loan
    • ViolaLass
    • By ViolaLass 12th Mar 19, 8:47 AM
    • 5,601 Posts
    • 7,728 Thanks
    ViolaLass
    NEVER pay interest in order to boost your credit report.
    • vacheron
    • By vacheron 12th Mar 19, 8:53 AM
    • 1,068 Posts
    • 1,031 Thanks
    vacheron
    Hi Liz.

    Glad you are making progress, but just to prove how utterly worthless credit "scores" are, here is mine when I logged into the MSE credit club just 5 minutes ago:

    CLICK HERE

    In this same week I have applied for three 0% cards and was accepted for all of them with the following limits:

    HSBC 9,000
    Tesco 5,600
    Barclaycard 11,300

    ....so read from that what you will!
    The rich buy assets.
    The poor only have expenses.
    The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • Paul_DNAP
    • By Paul_DNAP 12th Mar 19, 9:57 AM
    • 700 Posts
    • 856 Thanks
    Paul_DNAP
    Well done on the progress so far, but I would add my note to say I also feel it seems strange protecting savings with so many smaller debts and defaults hanging around you. Particularly if that is intended to be a house, you need to get your affairs tidier for the mortgage I assume?
    Seriously consider denting your savings and squaring off every credit card and paying every default as soon as possible. And then keep some savings ring-fenced as your "short term emergency fund" (i.e. become your own pay day lender, take 500 from that if you're short and pay it back in again.) - do not go anywhere near a commercial organisation to borrow 500 for a few weeks if you want your credit history to sparkle. And pay your credit cards off IN FULL every month for a while. And don't apply for any more cards for a while, especially the "sub-prime" high rate ones.
    (Although I could be wrong, I often am.)
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