Understanding Credit Score

lemonkettaz

lemonkettaz

lemonkettaz

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28 Nov 2005
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Hello,

I have recently tried getting a loan however been rejected twice so checked out my credit score and it says I have a poor rating...

I haven't a clue why, what do you need to do to get a loan ? :) without paying an awful amount of interest on it
 
erm, I have had a phone bill for about 8 yr, I've had gas/electric in my name before, i've a student loan and I am on the electoral register.

I am now earning a regular income full time trying to get on the ladder of life with a car and that but i can't get credit or a loan
 
I find it odd that you have been declined a Loan despite being on a regular income.

Have you checked your Credit File to make sure everything is okay and nothing fraudulent is on there? Bearing in mind all 'Credit Searches' you get with Loans etc. leave footprints on your file...and these can also have a detrimental effect - it's recommended that you only do a Credit Card/Loan Application once a year or something (if you really need a Loan) so as to reduce the amount of foot prints left.

The only way to improve Credit Score is with direct debits, Credit Cards, Loans, Mortgages etc. Have you tried getting a Credit Card? You could use that for something like food expenses, pay it back in full each month so as not to accrue interest and that will do a lot for your Credit File.
 
Ha I've applied for 2 in a week. I have tried a credit check company for the free trial and all I got was no negative factors currently affecting my score yet I have a poor credit score.

I've never not paid anything I really don't understand. I've never had a credit card before but have thought about getting one, might have a look into the bank this week to see what they say about the whole situation
 
I'm in the same position - trying to get on the ladder with just a credit card but I'm getting rejected from every single one at the moment. Seems to be that since I don't have any debt (except student loan), earn a decent wage and put money into savings that they don't see me as a good person to give a credit card to :p

Interestingly enough, Visa are currently holding a conference here at Robinson College. Tried to ask one of them for a credit card and they told me to go away! (although in slightly more colourful language)
 
It's really annoying me, i only wanted a loan for a car. I bet if I try and go and get one on hp they would probably turn me away too. plus it's cheaper for me to get a loan, monthly.
 
Hmm, some Loan Products allow for a 'Guarantor' to provide some contractual assurance to the Bank/Loan Company, perhaps one of these types of Loan might be a good idea and help you build your Credit Score.

It's a dirty thing..but maybe one of those Cards specifically for people with a low credit score might be worth a go - although the interest rate is very high on them, I doubt you would pay any interest if you pay it in full and on time - but do read the small print; although each and every Card Issuer has to abide by the Financial Services Authority, I've never trusted them and always make sure the terms and conditions provide me with all the information and reassurance I require; and that all my questions are answered.

I wouldn't go for a payday loan though, they are very, very high interest and I would never, ever recommend them.

Perhaps for now, buy a Car with cash (if you have the funds), get a Credit Card of some kind to pay for fuel costs which gets paid back in full each month and after a year you will look a lot more attractive to prospective Lenders.

Edit: Mobile Phone Contract might be a good idea, even if you get a cheap nasty one - as 2-3 Direct Debits that are consistently paid back in full each month do look better than just one as well.

I hope this helps.
 
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Yeh that helps. I'll look at getting a credit card, I could but my food on it and pay it off un full every month to start off with.

I have no clue when it comes to credit cards, any tips on what is best when getting them?

Cheers for that website, bit complicated ha :)

edit: got a phone contract, had it for about 8yr, don't really want to get another one
 
lemonkettaz said:
Yeh that helps. I'll look at getting a credit card, I could but my food on it and pay it off un full every month to start off with.

I have no clue when it comes to credit cards, any tips on what is best when getting them?

Cheers for that website, bit complicated ha :)

edit: got a phone contract, had it for about 8yr, don't really want to get another one
Click to expand...

A lot of Credit Card Companies are offering special loyalty/discount schemes when the Card is being used at certain Vendors and cash-back in order to gather more interest and Customers - have a look at if the cash-back percentage is competetive as well.

Interest rates can vary a lot with each Credit Card, try getting one with the lowest interest, just in case. Also, look at things like overseas usage charges and use this as a comparison in addition to cash advancement fees (not recommended to draw out cash with Credit Cards as it is very expensive).

I don't know a great deal, but hopefully the above will help!
 
This might be a dumb question but can you use the credit card like a debit card when paying for stuff using a card? I know not to withdraw money out with the credit card.

At the end of the month do you get a bill to help you avoid getting interest added? or do you have to remember to pay it off yourself before you start having to pay interest?
 
lemonkettaz said:
This might be a dumb question but can you use the credit card like a debit card when paying for stuff using a card? I know not to withdraw money out with the credit card.

At the end of the month do you get a bill to help you avoid getting interest added? or do you have to remember to pay it off yourself before you start having to pay interest?
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Yeah you're right - the Credit Card can be used just like a Debit Card - but you're spending the Banks money instead of your own. Some places won't accept Credit Cards (like the Post Office when you want to pay for Vehicle Tax) but most places, I would say 99% will do. Airlines will charge a certain fee for Debit and Credit Card use as well, this can vary but it's not normally much.

At the end of the month you will get a statement/bill of what is owed, when to pay it back and what potential interest you will have to pay for if it is not paid in full and on time.

Barclays are annoying me though, because I'm only receiving the Statements after the payment is due, so I always pay before I receive it just to be on the safe side, so I will be complaining about this at some point - but I got accepted on a Halifax Credit Card with a much higher credit limit (not that I need this really) anyway, so I could just wash my hands of the Barclays one.
 
Sorry to hijack the thread slightly, but it saves me starting a whole new one to ask this.

I have about £600 on a Credit Card, and I am paying it back £200 a month. Will this ruin my credit rating because it is not being payed back in a oner? Cheers :)
 
Bengaboy said:
Sorry to hijack the thread slightly, but it saves me starting a whole new one to ask this.

I have about £600 on a Credit Card, and I am paying it back £200 a month. Will this ruin my credit rating because it is not being payed back in a oner? Cheers :)
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Are you paying interest on it?
 
Bengaboy said:
Sorry to hijack the thread slightly, but it saves me starting a whole new one to ask this.

I have about £600 on a Credit Card, and I am paying it back £200 a month. Will this ruin my credit rating because it is not being payed back in a oner? Cheers :)
Click to expand...

Shouldn't be a major problem - as long as you are meeting minimum payments, but it does mean it will take longer to pay back due to interest.

Only if it becomes a Default where you haven't paid anything after numerous phone calls/letters from the Credit Card Company will it ruin your Credit Rating and the debt will probably be passed on to a Debt Management Company.
 
What ever you do, if you do end up getting refused do not apply for another loan/credit within 6 months after the first refusal, one of the posters mentioned 1 year but as far as I am aware it is 6 months.

There is a company out there called credit plus or something along those lines, basically they will give you a visa/master card and you pay somewhat around £6 per month and youonly use what ever you have on the card, so there is no way you can be over the limit or what not, this is also a very good thing to have to gain a good credit repart.
 
Bengaboy said:
Sorry to hijack the thread slightly, but it saves me starting a whole new one to ask this.

I have about £600 on a Credit Card, and I am paying it back £200 a month. Will this ruin my credit rating because it is not being payed back in a oner? Cheers :)
Click to expand...

No, it will probably have the opposite effect and improve your credit 'rating'.

(There is no 'rating', btw, just a pile of information the lenders can use as they see fit)
 
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