Some brief background history… Was a saver rather than a spender in my teens, went off the rails (financially) in my early 20’s a bit and racked up a bit of personal debt (both from uni and loan/cards), and have been gradually sorting myself out since (I’m now 36).

3 months ago, having discovered the Clearscore website (which means you can now get your credit report for free rather than paying for it), it about time to start being really proactive about my personal finances.

Firstly, I discovered that my score was nowhere near as bad as I thought it might be. I guess running up a few grand of unsecured debt and taking too long to pay it back is pretty tame compared to many! Secondly, I discovered the positives and negatives on my profile, which gave me something to aim for… I started with 4 positives, and 2 negatives, one of which was “no current credit card account” (seemed strange to me that I got a negative for having no current credit!), so I applied for a card with a £200 limit and set it to automatically pay off in full on the 1st of each months. Bingo… That’s one to strike off, or so I thought…

The other negative was about an outstanding loan debt from a long time ago. So taking this into account, I phoned them up to see what they would accept to pay the debt off (if indeed I could). They were happy with a significantly reduced settlement, so I arranged to pay 50% of the settlement there and then, and 25% off each month for the next 2 months… Sorted, both negatives gone, or so I thought!

Next month, 2 new negatives appear and my Credit Score plummets by nearly 100 points! One of which is that my “largest credit card limit is low” (FFS, really? You wanted me to get a CC but now it’s no good cos the limit is low!), and the other is that I have “at least one account in Default or Reposession” which is a bit more serious! How so?!?! I’ve now made the final payment to pay off the agreed settlement on said loan, so aside from whatever my personal overdraft may be (not significant and barely changed in 10 years) and my new credit card (which I make a point of using, but gets cleared automatically each month), I have no unsecured debts any more. In fact, a few hundred quid aside in my overdraft, I have no personal debt any more, unsecured or otherwise! So why is my credit score a lot lower now 3 months after I started to do something about it???

What do I need to do now? Wait? Speak to someone about the “Default” and try and get it removed? If so how?

For the record, I have my own business but all the finance is in my father’s name, I rent rather than own my own home (part of the reason I was proactively looking at improving my credit score), and I own my car (and everything else) outright with no finance on any of it.

If you’ve got any advice, I’d love to hear it please!!!

When you arranged to pay the loan off at a reduced figure is where your default happened. You ‘defaulted’ on the terms of the original loan agreement. If they didn’t make it clear to you at the time that this would happen you might have grounds for complaint. What do you want to improve your credit score for?

The default will remain on your credit file for 6 years after it is cleared. Having a default is not necessarily a problem though if you have a good reason.

If they didn’t make it clear to you at the time that this would happen you might have grounds for complaint.

They didn’t explain at all… So what to do?

What do you want to improve your credit score for?

At some point, want to get a mortgage. Otherwise it doesn’t affect me too much, but I’m old and trying to be responsible now, so…

Having a default is not necessarily a problem though if you have a good reason.

Is “they offered me a significantly reduced settlement if I paid now” reason enough?

Encouraged/intrigued by this thread I thought I’d get on to ClearScore and find out how I rated. With 10 positive and 0 negative factors I still only scored 477/700. 😡

MoneySavingExpert is a good place to go for all this, Martin Lewis explains it well.
On the credit card, I’d imagine they have a finite list of standard pros and cons, so the system probably isn’t linking it’s previous advice to get a card with current advice that the card limit isn’t enough. But both of these things individually will impact score.

Noddle and MoneySavingExpert credit club are 2 other free alternatives, either to compare how you score across different providers, or you might just find different sites give more useful advice for your situation.

I’ve always used Noddle.com for my credit reports, may be worth taking a look there to see if it highlights any more information.

It’s all utter bollocks and only serves the lenders.
According to Money Saving Expert Credit Club my score is over 800/999however Experian has it under 650.
Experian recently changed how they score and slashed thousands of credit scores overnight.
They answer to no one but their paymasters

The other negative was about an outstanding loan debt from a long time ago.

How long ago? If more than 6 years old this debt would have been absent from your credit report. Your contacting them would have re-opened it…
Phone up the credit scorer. It may be possible to have a note added to your file that you have cleared all debts as required voluntarily. Or it may not…
Money saving expert will have good advice.

I have a perfect credit score of 999 and no debt aside from my mortgage, yet I’ve just been offered a loan rate 3% higher than the advertised rate. (I earn decent money and the repayments are well within my means, in fact a friend with a lower credit rating and very similar disposable income levels to me recommended this provider and got the advertised rate).

The system makes no sense to me at all and seemingly penalises the fiscally prudent as well as those who’ve had ups and downs.

How long ago? If more than 6 years old this debt would have been absent from your credit report. Your contacting them would have re-opened it…

ARGHH!!! 👿

Phone up the credit scorer. It may be possible to have a note added to your file that you have cleared all debts as required voluntarily. Or it may not…

Can’t find a number… Any ideas?

I’m not sure how Clearscore works, whether it is a ratings agency itself or just takes information from Equifax, Experian, etc, but contact them to see what can be done.
Somewhere in here will be the info you need:
http://forums.moneysavingexpert.com/forumdisplay.php?f=257

I’m not sure how Clearscore works, whether it is a ratings agency itself or just takes information from Equifax, Experian, etc, but contact them to see what can be done.

It’s Equifax ratings.

the principle behind it is to allow potential lenders to gauge your risk…

If you have a credit card with a low limit, it suggest that the lender has decided that you are a higher risk and to limit exposure they have given you a low limit.
To make thinks worse, if you have a low limit, and often get towards that limit (say you buy fuel on it, and usually put £180 a month on it)
it looks like you are often using most of your available credit, this makes you a higher risk to extend more credit to.
Add in if its recent, you dont have a good (long) history of managing that credit, so more credit is risky.
AND, as you have just taken out credit, if you are looking for “More” credit so soon, alarm bells are set off.
This is worse than you deciding you don’t need a credit card.
Had you applied for and been declined credit cards, it would be worse still.
If you have a credit card with a high limit, and only use a bit of it regularly, this suggests that you have access to credit, and use your credit facilities “well” with the capacity to service more credit.

Also remember, it is not in the interests of the credit agency, or the supplier to turn away custom, they want their systems set up to “pass” as many genuine acceptable risk people as possible.

You can allways challange a credit decision with the lender, and having a personal discussion with an underwriter can end in them deciding to take your business, as they understand that their credit policy driven by the data they by from the CRA might not give a true reflection.

hope that helps

Forget getting a ‘free’ report.

Go to Experian and Equifax and pay your £2 each to get your credit file.

A credit score is just what that website has decided is your credit worthiness, which has bugger all to do with you credit history, and then comparing it against their lending criteria.

What you should be doing is checking your credit file to see if you have any default payments, and looking to clear them.

Make sure you are on the electoral role etc.

Each lender has their own criteria for lending, they wont be logging on that website to see what score you have been given, they will be checking your credit history.

How long ago? If more than 6 years old this debt would have been absent from your credit report. Your contacting them would have re-opened it…

That is not true. If an account was defaulted on over 6 years ago and still not settled it would still appear.

When did you do the voluntary agreement to pay off? If it was last week, you will have to wait 6 years for it to clear….and even then you may have to chase to get it removed.

Get a mobile phone contract – that counts as credit. Buy a car on a loan etc etc.

The whole credit thing is a bit perverse that you are considered un credit worthy for 6 years, but then after that it becomes irrelevant, even if you have been made bankrupt.

Encouraged/intrigued by this thread I thought I’d get on to ClearScore and find out how I rated. With 10 positive and 0 negative factors I still only scored 477/700.

similar, I have 11 positives, 0 negs, no debt except a small mortgage & only scored 464! Not looking to borrow though so think I’m over it 🙂

I just did a report on Clearscore, and it marks me down for not being on the electoral role at my current address. This is entirely untrue, I’ve voted twice since moving in!

Cheers, Rich

That is not true. If an account was defaulted on over 6 years ago and still not settled it would still appear.

it doesn’t – I’ve got a few, a Halifax debt that they wrote to me and wrote off, and a CCJ for a Yorkshire Bank credit card which is all but paid off through a debt collection company, and an egg card that they converted into a loan, from 2004ish who I’ve not heard from in years,

neither the Halifax/Egg debts or the CCJ show on any credit report anymore

they only stay on if you are actively making payment in the last 6 years,

they only stay on if you are actively making payment in the last 6 years,

Or if you acknowledge the debt in any way.

Just to give my post some credence.. I work in the banking industry, mortgages in fact and I have done for many years. I have worked for 3 banks and also for a broker specialising in doing mortgages for people with bad credit. I would advise you not to worry about your ‘score’ on there at all. As said above each lender have their own credit scoring system. If you want a mortgage then a default might get you turned down but there are plenty of lenders who would take you on. If you’re looking for a mortgage in the future things you can do now to improve your chances… 1. SAVE. The biggest deposit you can muster is the biggest advantage you can have to getting a decent mortgage, if the banks have to lend you less cash then you’re a lower risk. The best rates are below 60% LTV. 2. Stay in your job, longevity of working in a perm contract looks better than someone flitting about every year. 3. Pay off any debts and don’t take any more out if you can help it. If you have any debts outstanding that reduces the max mortgage you can have. There is some credence though to having a credit card and paying it off every month. This shows you’re a good borrower and treats the T&Cs with respect. 4. Stay in credit in your current account.. when you apply for a mortgage the lender these days will usually ask for 3 months bank stats and if they show you consistently in your overdraft that doesn’t look good, espicially if you have a deposit. Why are you overdrawn if you have savings? It shows you can’t manage your finances..

460 for me plus it says one negative which is not having a credit card – which i do….

I worked in finance and banking for about a decade, I was in sales, I was an underwriter and I helped devise some underwriting policy, I know credit reports inside and out, my knowledge is a little out of date, but the fundamentals haven’t changed, just some policies.

There are some truths on this thread, some outdated truths and some ‘urban myths’. Some of the truths don’t tell the whole story because the poster couldn’t possibly know the whole story, credit underwriting is purposely a cloak and dagger type of thing.

The credit reporting industry is crooked, the consumer side of it anyway – they make more money from consumers these days than creditors and they push a LOT of snake oil services.

My Advice for the OP:

Don’t worry about the ‘score’ it’s made up, it’s fictional, it means *almost* nothing.

If you want real, semi-bespoke advice about improving your credit worthiness – go to the MSE forums, you might even see me over there, or speak to Step-Change or The Money Advice Service or someone they recommend – the web is full of shysters and wrong ‘uns pretending to help people with “advice sites” but they just want your money. You may have hurt, rather than helped yourself (ironically) contacting your old creditors

As jekkyl says. you need to show you are responsible with your current credit before getting any more.

I was told these are the basic rules when I worked in a bank (pre-credit crunch but should still be reasonably accurate) by the regional credit controller at a training day:

* Current account never (or very rarely) going into overdraft before payday.
* Credit card never maxed out. Average credit card balance over 12 months around the 1/3rd credit limit. The odd big purchase should be paid off quickly. Balance should hit 0 once a year or so.
* A decent savings balance – a month’s wages or above. Whatever regular payment into the savings account should stay in savings regularly (no dipping come month’s end etc)

What people above are saying about then ‘following the rules’ and not getting the best offers is a common one. You can be worse off credit-wise if you rarely use credit, thus not have a credit history, than if you live off credit but manage to get through.

You may have hurt, rather than helped yourself (ironically) contacting your old creditors

This is the thing that’s really turning my stomach right now! Considering there’s people posting on here with credit scores of 400 or so that have never got in trouble financially, and mine is only slightly lower, I’m not too concerned there. What’s pissed me off is that in trying to do the right thing, I’ve inadvertently set myself back another 6 years potentially! What a crock basically!!!

Ok so advice noted on staying out of overdraft. Will endeavour to get out and stay out ASAP. Have treated the credit card as an exercise to improve my credit rating, so am making sure it’s paid off every month and trying to use it but not too much or for too big purchases. I’m playing their game if you will.

As for saving… Truth be told, being self employed I’m not paying myself a huge wage anyway, not that the business could afford it even if I wanted one, so realistically, I’d manage £100 a month at best right now. 6 years ago I was earning enough that I could save £1k a month (which I did for a while and paid off a load of debts), that’s no longer the case!

@mboy,

If you’re thinking about a mortgage in the future, even if it’s the early stages and you might be a year or more away – speak to an IFA.

There’s not point working away towards it, if you don’t know what you need to get there – self-employed mortgages are tough enough.

Well… 5 months down the line, and my credit rating is now better than it was initially, and is continuing to improve. Hooray for that!

Have been looking into the default, and seems I have grounds to get it overturned (or at least removed from my file) as it should be for when the original default happened, which was more than 6 years ago, rather than the Autumn of 2016 when they’ve recorded it… which should help if it’s true!

Keep using the credit card for most of my weekly shopping and fuel, and keep paying it off within a week if not immediately. Seems the importance of this is underestimated when it comes to your credit score, they really like to see you using even small amounts of credit and paying it off regularly!

Oh and getting a new phone on contract (rather than paying for it outright) has also helped strangely enough…

At this rate I may be deemed an acceptable risk by a mortgage lender sometime in the next few years potentially!

I think lenders have their own criteria independent of the credit score agencies.

What makes for a good credit score is the ability to manage debt. Someone who has no debt (loans, mortgage, utilities, etc) and loads of savings may be deemed a risk as the lender has no way of assessing their ability to manage debt.

Applying for a credit card and using it for small amounts (and keeping up-to-date with repayments), for example, is a constructive way of appearing more able to manage debt and ultimately increasing the credit worthiness.

11/0 here. No debt whatsoever (and haven’t had for years), pretty significant savings, CC with large limit that gets paid off every month. Score – 495 🙂

One of the first bits of financial advice from my parents was to get a credit card and pay it off every month. They’re of the school of no debt (other than a mortgage), but a credit card is very helpful to your credit score which will help you get a mortgage.

Paying off every month the bank kept upping my credit limit to silly amounts, which helps further.

Only had the odd slip up forgetting a payment and getting a charge, and early days after uni I was using an overdraft, but after that it’s been 999 for years. Have had interest free credit for the odd thing over the years and car finance where you don’t get extra charges if paid off on a set date. Possibly doing those also helped.

Also note that the score varies per company and not sure if some of the cheap/free companies doing the score are getting it from the main ones most companies look up (Equifax and Experian). Plus some don’t use the score at all but look at your actual credit history and apply their own rules.

I used to work for Experian. Having a credit card and paying it off fully each month is not what the credit card companies want, that earns then no money. The ideal customer for them is someone who approaches their credit limit, pays the minimum on time each month, earns them a bit of interest, and then clears the debt after a couple of months. It’s called a revolver customer and is the credit company golden customer. If you have a proven track record of that then they will be throwing credit deals at you.

Do companies need your permission to run a credit check? I’ve just been looking at my report on clearscore and it seems that hastings and admiral have been looking at my creditscore. I’ve used them in the past, but not for a couple of years as I don’t have car insurance with anyone anymore.

Or am I about to get scammed?

chrisa87 – Member 
Do companies need your permission to run a credit check?

Technically yes. It will be buried in small print in the T&Cs with any agreement/contract/purchase you’ve made in the past and most likely didn’t read.

Common for car insurance companies to do checks on renewal time before the renewal date. Though once you cancel they shouldn’t do it again (doesn’t stop them phoning you up hundreds of times the month before renewal though).

The companies doing the check have to be registered authorised with the credit agencies. General public can’t do credit checks except on their own credit history.

Common for car insurance companies to do checks on renewal time before the renewal date. Though once you cancel they shouldn’t do it again (doesn’t stop them phoning you up hundreds of times the month before renewal though).

Bit annoying though, if you haven’t had a policy with them for at least 2 years because you cancelled that policy and went with someone else

But equally, surely you prospective mortgage provider sees that and concludes your car insurance is due for renewal, not that you are a grave financial risk? Or is that too sensible?

It’s called a revolver customer and is the credit company golden customer. If you have a proven track record of that then they will be throwing credit deals at you.

I’m one of those about once a year – basically become a bit lazy about paying something off got a couple of months then pull my finger out and clear down the balance and then not touching the credit card for months.

Might explain why I have £40k of available credit on my cards..!

Coke and hookers anyone? 😉

Well another week passes…

Gone from 7 positives and 3 negatives, to 8 and 2 in that time! Seems without any intervention, my default has been wiped from my score, but not only that it has turned into a positive as I now have “no accounts in default or repossession”… 😀

And one of the 2 negatives is still that my credit card limit is very low, so will see if they can extend that as I’ve been paying on time every month…

11 positives, no negatives, car loan, couple of credit cards with a bit of a balance (c5% gross annual income), mortgage. 560. You guys need to borrow more!

I’ve never been able to work it out, I’m not entirely sure it means all that much!