Ways to improve credit rating?

Hedge

Hedge

Hedge

Soldato
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18 Oct 2002
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19,578
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Somewhere in the middle.
Currently my credit rating is mega bad. :(

I got credit cards when I was younger, missed payments went out of work for a few months.. missed more payments!... and in the end I agreed payment plans on the 5k I owed.

Currently my debt stands at 3500..

Lloyds gold - Frozen, No interest. 2500 owed. £40pm payment
Egg card - Frozen, No interest. 1000 owed. £10pm payment

Obviously this isnt a great deal of money, particularly without any interest being added. So my plan is to start paying larger amounts off and clear this debt by the end of the year.

The trouble then will be securing credit again. Im no longer as irresponsible with money as I was in my younger days.

What methods would improve my poor rating? clearing all debts then saving money up? does that help?


Thanks :)
 
My limited and very simplified understanding is this.

You start at 500. You borrow money and pay it back on time, it goes up in proportion to the amount borrowed. You borrow money and dont pay it back, it goes down in proportion to the amount borrowed and how late the payments were.

Someone will no doubt correct me though :)

Other than getting what you owe paid off ASAP, there's not much I can suggest. Unless your mobile's on PAYG, you could switch to a contract which might help a bit, provided you pay the bills :D
 
Get one of those Capital One cards with a low limit and really high APR?

Get your other stuff paid off first!
 
You need to have a credit agreement which you actually stick to.

Try and get a "credit rebuilding" style card (like the Capital One card), spend a few quid on it and pay it off each month.

It'll take a few years before your actions of the past are no longer taken into account by places searching your credit history, but in the mean time, paying off any agreements you can get will certainly help.

I was in the same position as you when I turned 20, and now 5 years later I have a perfect (according to experian) credit history, and don't have any trouble with high-street lenders.

Other things that may help include gym memberships, mobile phone contracts, anything which you are contractually obliged to pay by direct debit each month.
 
As far as I know the only way to get a good credit rating is to be a good borrower.
 
If I signed up to say a mobile contract.. and direct debit was set to come out of my mothers account, would that improve her rating or mine? just out of curiosity :)
 
I used to work for experian and credit scores are in no way near as simple as you might think or suggested in this thread.

Still, the best thing to do is get another credit card, yes you will be limited to ones with massive APR probably 35%+, but no matter you won't be paying interest..... just setup a direct debt to pay the FULL amount each month. Then simply live off the credit card, shopping, petrol, whatever stick it all on the card.

EDIT as said Capital One seem to be good at dishing out cards to people with poor ratings, least they used to be.
 
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Hedge said:
If I signed up to say a mobile contract.. and direct debit was set to come out of my mothers account, would that improve her rating or mine? just out of curiosity :)
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If the initial credit search is done on her, then hers.

If it is done on your history (and thus taken out of your account for at least the initial payment, then changed), yours.
 
theres more to it than just borrowing money although that adds loads of points, if you have a long term fixed address and are on the electoral register that also adds points

get buy now pay later plans on items, when it shows up on your record it appears as the amount you would have paid if you didnt pay if off by the deadline which is usually something stupid like 50% more

MW
 
iaind said:
Not sure if they'd allow the DD to come out of an account thats not in your name though...
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My egg payments come out of my mothers account, but obviously the egg card is in my name.

Im gonna pay a visit to my bank tomorrow and see what my situation is like. currently I just use a cashpoint only card and not a Debit card. Which is pure hell anyway :(

Im joining the RAF officially in 2 weeks so that stability might have some bearing.

I was about to fill out the form for the Capital one card but it asked employment status and right now im unemployed (left my job last week for RAF)
 
You can pay to see the file the credit rating agencies such as Experian have on you, then you will know what is counting against you and may be able to address it.

Rgds
 
radderfire said:
You can pay to see the file the credit rating agencies such as Experian have on you, then you will know what is counting against you and may be able to address it.

Rgds
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Sounds useful, anyone done this? How is information presented?
 
Hedge said:
Sounds useful, anyone done this? How is information presented?
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From memory mine just had a list of all the cards I've had with green ticks in each month for successful payments and I think a red tick for missed payments.

Also shows credit limit on each card.

Mine is a complete mess as they always confuse me + my dad seeing as we have the same first name :o
 
OoOverclockaoO said:
From memory mine just had a list of all the cards I've had with green ticks in each month for successful payments and I think a red tick for missed payments.

Also shows credit limit on each card.

Mine is a complete mess as they always confuse me + my dad seeing as we have the same first name :o
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To be honest I think Id be scared to look at that. I missed/late payed loads of my cards at the time. Wasnt too bad but I lost my job etc at the time then it all went **** up.

Even on my low starting wage in RAF i think I best pull my finger out and try to pay about 250pm off my debts.
 
No real point getting your credit file unless you think you have a legit case to challenge something on it ie if you have been unfairly tied to a bad address or individual, in your case the bad record sounds like its all your own doing.
 
Can I ask why your getting a mobile phone contract? Why not go PAYG and use the money you were planning to spend on your contract, on repaying the money that got you in this mess?
 
Bigsy said:
No real point getting your credit file unless you think you have a legit case to challenge something on it ie if you have been unfairly tied to a bad address or individual, in your case the bad record sounds like its all your own doing.
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Rubbish!!

Keeping a close eye on your credit file is a good thing!!

Identity theft for a start!! if something shows up on your credit file you know nothing about you can do something about it before its further down the path.
 
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