Credit Rating/Obtaining Credit

Smitho3 · 17 Apr 2008 at 15:48

Im confused!

My girlfriend, a medical student with very little income is able to obtain a credit card with a £2000 credit limit within 5 minutes of opening up a bank account with abbey, yet i have been a customer of theirs for 2 years and have a far greater income yet was declined! I have never missed any payments with any of the credit i currently have, i even paid the full £1500 balance off my store card in one hit!

I obtained a credit score from Experian and was surprised to see that i had a Poor rating! Now how does one go about upping their credit rating? The only credit card i have been accepted for is a stupid capitol one card with £25% APR!

Any idea's?

Glaucus · 17 Apr 2008 at 15:50

Smitho3 said:
I obtained a credit score from Experian and was surprised to see that i had a Poor rating! Now how does one go about upping their credit rating? The only credit card i have been accepted for is a stupid capitol one card with £25% APR!

Any idea's?

is everything registered at the same address?

Nothing wrong with capital one cards. If you pay it of instantly and even if you don't, it's only about £14 a month on £500. Not great but hardly a huge amount.

Are you registered to vote and is it at your correct address?

Have you got any contracts? phones, some insurance policies etc?

Wiggins · 17 Apr 2008 at 15:50

Your one of the unfortunates like myself who pay up their debt in full which leads to a bad credit rating as your not in debt.

Have a £1000 debt, pay the minimum payments and they will be throwing credit at you left right and centre.

I had the same problem with Barclays as I needed a credit card for our wedding in Mexico this year.

LiE · 17 Apr 2008 at 15:51

I have the same problem. On 31k a year with a mortgage and no missed payments. Declined by my bank for their basic credit card.

robbiemc · 17 Apr 2008 at 15:55

I had a similar problem recently and only found out about it when I signed up for Experians online service.
In my circumstance I had paid off an outstanding debt a few years ago, but the collection agency didn't bother to tell the credit agencies (disgraceful really, they've got two jobs: obtain payment, then let credit reference agencies know. They only did the first bit).

A few phone calls later and they sorted it, which I could see reflected on my Experian account within a couple of weeks. I've now got a 'good' credit rating, so it's definitely worth looking into.

V3g3tto · 17 Apr 2008 at 16:03

I bought my latest PC in sig on credit in an attempt to up my credit rating as i've never really had anything such as loans before. It's a shame you must get into debt before you can be considered 'safe' to be given money, surely people who have never had the need to borrow due to being careful should be looked on favourably.

Still, if i want a mortgage at the end of the year, i gotta get myself into as much debt as i can, kinda ironic really as that's what i need to avoid...

Glaucus · 17 Apr 2008 at 16:05

V3g3tto said:
surely people who have never had the need to borrow due to being careful should be looked on favourably.

But a simple things like phone contracts will give you that and it's not exactly debt.

No credit history is just as bad as bad credit history. Uncertainty means risk.

V3g3tto · 17 Apr 2008 at 16:10

Well yeh, no credit history makes sense, but it seems the more they can milk off you in interest, the better your rating: "We'll scratch you back if.."

I'll be paying off my PC in August with a £900 lump sum.

Wiggins · 17 Apr 2008 at 16:18

I recently opened an account with a Catalogue Company as I thought if I'm to get a credit rating, I may as well get it with someone I pay 0% APR with.

Will see how that goes.

LiE · 17 Apr 2008 at 16:22

robbiemc said:
I had a similar problem recently and only found out about it when I signed up for Experians online service.
In my circumstance I had paid off an outstanding debt a few years ago, but the collection agency didn't bother to tell the credit agencies (disgraceful really, they've got two jobs: obtain payment, then let credit reference agencies know. They only did the first bit).

A few phone calls later and they sorted it, which I could see reflected on my Experian account within a couple of weeks. I've now got a 'good' credit rating, so it's definitely worth looking into.

Who did you call? I have a similar problem with things appearing on my report that aren't working in my favour.

robbiemc · 17 Apr 2008 at 16:36

msm722 said:
Who did you call? I have a similar problem with things appearing on my report that aren't working in my favour.

Good question. In my case it was the debt collectors as I had kept a record of what I'd paid and to whom.

OllyM · 17 Apr 2008 at 16:42

Wiggins said:
Your one of the unfortunates like myself who pay up their debt in full which leads to a bad credit rating as your not in debt.

Have a £1000 debt, pay the minimum payments and they will be throwing credit at you left right and centre.

External credit reference agencies do not generally tell companies if you pay off in full. Equifax will now show the amount of your last payment and how many cash advances you've had in the last month though, but not historical information.

Experian simply shows this:

And that card is paid off in full every month.

Wiggins · 17 Apr 2008 at 16:50

Interesting.

I will pull off an online report later with Equifax and see what it has to say for itself.

V-Spec · 17 Apr 2008 at 16:59

Experian are the biggest and hold the most information, more companies have contracts with Experian, if you apply for credit they WILL check experian, most also check Equifax, although theres a few things missing on Equifax for me. They have a pretty decent membership scheme where its about £6 a month, but you can view your report as often as you like, if you want a score its about £6 for each one..
They also send you email alerts if anything "funny" happens, like when Carphone Whorehouse defaulted me because of their utter incompetance, thankfully it all got sorted and i'm back to a rating of 999/1000

LordSplodge · 17 Apr 2008 at 17:07

It is amusing (raise eybrow type not laugh out loud type) that people with no debt who pay in full each month have a "bad" credit rating yet those with plenty of debt (although not defaulting) get credit thrown at them.

I sit somewhere in the middle as in I have a good (nee great) credit rating yet not a lot of debt. Win.

OllyM · 17 Apr 2008 at 17:08

LordSplodge said:
It is amusing (raise eybrow type not laugh out loud type) that people with no debt who pay in full each month have a "bad" credit rating yet those with plenty of debt (although not defaulting) get credit thrown at them.

Except that isn't true.

LordSplodge · 17 Apr 2008 at 17:10

OllyM said:
Except that isn't true.

Care to elaborate rather than give a terse four word answer?

Oh and the bit about my credit rating certainly is true!

OllyM · 17 Apr 2008 at 17:12

I explained it up there. The CRA's don't store if you pay your balance off in full or not. I even included a sample from my credit file (which is of a credit card paid off in full every month).

V-Spec · 17 Apr 2008 at 17:16

If you pay your credit card off in full each month its considered very good, providing the card is active, and isn't paid off and settled..
The highest weighting in credit scoring is the amount of active accounts and payment history.

You could open 5 store cards and spend a fiver a month, if you kept the balances at £0 on each one, (totally paid off) you'd end up with an excellent credit rating providing the cards were active, which is pretty much what i've done.

LordSplodge · 17 Apr 2008 at 17:17

OllyM said:
I explained it up there. The CRA's don't store if you pay your balance off in full or not. I even included a sample from my credit file (which is of a credit card paid off in full every month).

Ahh, my bad, but how does that explain the prevalence of credit to those persons in debt (again not defaulting) versus the difficulty that some people have who are not in debt, apart from the fact they have little or no credit rating?