Viewing 27 posts - 1 through 27 (of 27 total)
  • How can I improve my credit score?
  • bigyinn
    Free Member

    About 4 years ago my debts all caught up with me, after OH gave up work and had our son. So I set up a debt management plan with my creditors.
    Payments were negotiated and paid regularly every month, barely touching the amount owed.
    After a couple of years stuggling my mum very generously paid these debts off, around £12k IIRC, everything settled nothing left outstanding.

    At the moment I have a basic current account with no overdraft, no credit cards, loans or other debts. At some point in the next 5 years I’d like to buy a home so a mortgage will be needed.

    What tips can the hive mind suggest to get my credit rating into a better state by then?

    druidh
    Free Member

    Get a credit card and don’t use it?

    BoardinBob
    Full Member

    Do you have a bad credit score? Have you checked? The fact it’s all been paid off will have improved it, regardless of who paid it.

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    allthegear
    Free Member

    With the credit reference agencies or with your mum??

    Keep completely and utterly up to date with EVERYTHING;
    Do some small things that cause a record to be left – this might be things you have to do anyway, like car insurance;
    Register for voting.

    Rachel

    lunge
    Full Member

    Get a credit card, buy somethingb with it each month, pay it all off at the end of each month.
    Get a contract mobile phone and pay that on time every month.

    But, as above, check you do have bad credit, you can get Experian free for a month and that also gives you specific tips to improve your rating if it’s needed.

    Woody
    Free Member

    A few basic things (if you don’t have them already) get a landline, make sure you’re on the electoral roll, small credit agreements eg. car insurance payments, if you can get a credit card pay it off each month. Check with credit agencies that your records are correct, particularly now the debt is clear.

    creamegg
    Free Member

    sign up to equifax for the free 30 day trail (you can cancel before first payment is made). Once you signed up you have access to some info but have to pay approx £5-£6 to see your credit rating. Well worth doing IMO, I did it last week and they show you your credit score and areas you can improve. My score was a lot better than I anticpated, Im nearly in the ‘excellent’ bracket but would have guessed I was in ‘poor’ or ‘very poor’ before checking (due to bad debts years ago when i was a student), so it was a nice suprise. I put off checking for years in fear for the worst.

    I can improve my score by registering on the electoral role, which ive now done.

    bigyinn
    Free Member

    I’ve applied for Bank accounts in the past (since the debt was paid) and been turned down.
    There are a number of accounts where I was 6 or 7 payments late.
    Im also aware that being rejected for things also has a negative impact on your credit score. I suspect that applying for a credit card won’t happen as they’ll say no.

    Ecky-Thump
    Free Member
    Taff
    Free Member

    Get a credit card and don’t use it?

    That doesn’t help it worsens.

    Try and get a credit card and use it like you have been using your debit card, pay everything off each month before any interest has accrued.

    Direct debits are always good too providing they go through every month it’s showing good cash flow.

    FunkyDunc
    Free Member

    The bad credit will stay on your file for 6 years. But I am not too sure how voluntary arragements appear on a credit report.

    1. Get your credit reports from both experian and equifax, and check every single bit of information on them to make sure it is correct (often it is not) Companies often do not remove defaults etc even after they are supposed to.
    2. Make sure you are on the electoral role.
    3. Get a credit card and use it (even if you have to get one with a stupid APR) just make sure you pay it off every month.
    4. Try and get a contract mobile phone, or some other type of basic credit agreement. This all shows you can make payments and stick to them
    5. If you are declined credit, find out which agency they use and get the report from them.
    6. If you are declined credit DO NOT apply for credit any where else for at least 3 months.
    6. Speak to these guys once you have the information above http://www.cccs.co.uk/ they may be able to offer further advice.

    The whole bad credit thing is a weird, secrative, unknown bizzare world. Mrs FD has previously in her past been declared bankrupt and spoken to numerous Financial Advisors/Mortgage Advisors who were ‘experts’ in credit work, but in reality knew nothing. The same goes for lawyers very few actually know the detail.

    creamegg
    Free Member

    Equifax shows the number of searches (what they do when you apply for credit), and I think they recommended this to be a maximum of 3 in every 6 month period so yod be better off leaving it a while before applying for credit. Not sure if they do this just to open a bank account tho?

    6 or 7 late payment will go against you quite badly but I think only stays on your history for 6 years after the debt was settled. 6 years is a long time you will get it cleared eventually if you keep up to date with future payments.

    Once your credit rating gets better, try n get a small overdraft but dont use it as such. Just it being there will improve your score

    Woody
    Free Member

    bigyinn

    Try Cooperative Bank. Not only are they much better ethically than most, I think they have an account which is useful if you have a poor history.

    bigyinn
    Free Member

    ecky, thanks, I was on there just now looking for just that sort of thing!

    Flaperon
    Full Member

    You can look at your credit record as many times as you like – it does leave a note saying it’s been checked but this info isn’t available to anyone credit scoring you.

    hmanchester
    Free Member

    First thing is to check out your credit report, you can’t do anything without this. As Flaperon says, checking your own report as no negative effect.

    They have to provide you with the reports for £2. Just get these statutory ones and see what they say:

    http://www.equifax.co.uk/Products/credit/statutory-report.html
    http://experian.co.uk/consumer/statutory-report.html

    Then have a look at the date that things were settled. If they were 4-5 years ago as you say then the best thing is to wait until they drop off your report at the 6 year mark. Most mortgage companies will not touch you or charge extortionate rates with an IVA or default on your history.

    Things you can do in the meantime are to make sure you’re on the electoral roll and try to pay your bills on time.

    As to buying a house, I’d get looking before the 6 years are up. Get an idea of the market in your target area, see a few places, talk to a few people. Do this without the time pressure of actually having to buy, then when you do have finance you will be a lot more clued up and confident which will speed the process up.

    Matt24k
    Free Member

    http://www.vanquis.co.uk/
    This is specifically designed to repair your credit rating.
    BUT before you start clicking links make 100% sure that you are ready to accept the responsibility that goes with it. If there is the slightest thought that your Mum or an IVA will bail you out again if it all goes pear shaped then leave it a few years.
    Before applying for the card open an instant access savings account at a local Building Society branch.
    What ever you do make sure that you pay the Vanquis card off in full every month as the interest rate is punitive. Use it for small purchases that you would pay cash for and put the cash some where safe like the savings account that you have opened. When the statement comes, pay it with the cash from the savings account. That way you are building a small credit and savings history. The minute you do not repay it in full you are back on the slippery slope and you must cut the card up and slap yourself about. Don’t try and kid yourself by making excuses. The card has only one purpose and that is to rebuild your credit rating, ready for the mortgage.
    Do not always carry the card with you and do not use it for online purchases. Only take it for specific, normally cash, purchases eg petrol or grocery shopping.
    If you are declined by Vanquis then forget any type of credit for the foreseeable future.

    footflaps
    Full Member

    You can always get a kind parent to guarantee a mortgage, my brother is self employed and his dad acted as guarantor, which enabled him to get a mortgage. I did the same thing with my first car HP as I had problems with banks and debts as a student (the day I graduated Barclays revoked my student overdraft and demanded my account be settled – insane but true).

    FunkyDunc
    Free Member

    Oh and just to add further, don’t think that as you may have bad credit with one, you will with another.

    Mrs FD walked in to a VW dealership and came away with £20k worth of car on HP Finance whilst still being declared a bankrupt on her credit report.

    “You can always get a kind parent to guarantee a mortgage, my brother is self employed and his dad acted as guarantor, which enabled him to get a mortgage”

    You can, but you be in sub prime mortgages and paying a fortune for it. Much better to wait the 6 years at which point nothing stops you applying for any mortgage on the high street.

    bigyinn
    Free Member

    Since sorting out the debts I’ve not missed a single payment for ANYTHING, I have a mobile contract and most of my stuff i paid by DD now.
    Sounds like hte best way forwards is to have a look at equifax next and see how it is since I last checked it 18 months ago.
    Equifax gives a score of 334 😥 All down to the late payments / defaults which are all now settled.
    Now what??!

    FunkyDunc
    Free Member

    “Equifax gives a score of 334 All down to the late payments / defaults which are all now settled.”

    Ignore that score its completely irrelevant. Its just Equifaxe’s marketing tool to keep you coming back to see your score improve.

    Each company makes its decision on credit in house, or at least on criteria they imput to the decision. Experian/Equifax hold the data on your credit history, then a company uses this and other data to asses the risk of lending money to you.

    Now what- get a credit card and use it. Get insurance policies on pay monthly rather than pay in one go?

    Again be wary too many sucessful credit applications in a short space of time could make other lenders wary.

    creamegg
    Free Member

    Register on electoral roll. you can prob download form of your local council website (my mrs did it for me) and pop in post. takes 2 mins to fill in.

    Next thing try n get a small overdraft with your current bank account or last resort get a credit card as the guy above says but use it wisely to build up your score. Im not sure if you even need to use it as i have green marks over my account which ive never touched the OD. If your not successful dont keep trying for one as this will go against you. If you fail try again in 6 months time.

    Then its a waiting game. Make sure your up to date from now on and try and save for a deposit

    FunkyDunc
    Free Member

    To be honest your position isn’t going to change until the 6 years is up, then getting credit will become a easier, as long as you plan by doing the above recommendations

    bigyinn
    Free Member

    The only thing out of all the suggestions that I havent done is try and get a credit card or overdraught. Im a little wary of getting either TBH, but if it helps I’ll just need to disciplined with my use of them.
    Out of interest does it matter how much you put on the credit card or just the fact you’re using it and managing it properly?

    FunkyDunc
    Free Member

    No value not important, just more the fact you can pay it off.

    Mrs FD’s cc had a limit of £150 anyhow. That was Capital One who gave her one when still bankrupt.

    creamegg
    Free Member

    I think it does record the amount of credit you have but anything is better than nothing. Build it up slowly.

    I have several red marks against me for late payment back in 2009 and my rating is already a lot better due to keeping everything up to date and my bank kindly sent me an £8k credit card last week, not that im intending to use it on anything other than to build up my credit rating

    bigyinn
    Free Member

    How about that, I’ve just found out that Im listed as living at 2 different addresses (i moved 18 months ago), despite me telling the registrars at the last election. Letter just sent off to the council to update things.

Viewing 27 posts - 1 through 27 (of 27 total)

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