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how to go about re-building a credit score?

Discussion in 'General Discussion' started by Einskis Nokkur, 2 Aug 2021.

  1. Yaayuh!

    Capodecina

    Joined: 5 Nov 2010

    Posts: 21,863

    Never needed to do a "credit score" thing with a 3rd party company and i've had a few loans, currently run a couple of credit cards and have a mortgage (technically 3) that we've moved before.

    If I was asked by a loan/mortgage company to sign up to a 3rd party credit score data company I would go elsewhere just on principle of service, they should have their own way.
     
    Last edited: 6 Aug 2021
  2. Semple

    Sgarrista

    Joined: 5 Mar 2010

    Posts: 9,023

    Was going to reply to your earlier post to say stoozing pretty much died when all the current accounts that were offering a reasonable rate many years ago have now plummeted to near zero.

    I'm sure money could still be made, but with the low interest rate, a £100 return on a 50-60k credit line barely seems worth the effort.
     
  3. blairw

    Mobster

    Joined: 19 Mar 2006

    Posts: 3,508

    Location: Scotland, UK

    They don’t see the score - they get full access to your credit history and build their own score for you internally. The Score is just a product these companies have developed to sell their products too you - it’s an actual thing in America but not here.
     
  4. bainbridge

    Mobster

    Joined: 9 Dec 2009

    Posts: 4,473

    Location: Bristol

    If that's the case, why do some lenders use Equifax and others use Experian etc.?
     
  5. blairw

    Mobster

    Joined: 19 Mar 2006

    Posts: 3,508

    Location: Scotland, UK

    Because they are credit reference agencies - they hold the credit information, there is more than one because that’s the market. The score they develop is simply a product they sell to consumers who believe it has significance like it does in the states. You can obtain your credit report from the companies for a much lower cost.
     
  6. BUDFORCE

    Mobster

    Joined: 3 May 2012

    Posts: 4,088


    Correct.
     
  7. bainbridge

    Mobster

    Joined: 9 Dec 2009

    Posts: 4,473

    Location: Bristol

    You can obtain your credit report held by the 4 big agencies for free, by setting up an account with checkmyfile and then cancelling before the end of the first month.

    You clearly know more about credit scoring than me. The only reason I was querying the actual score was because my previous employer was an insurance broker and the finance company we used began credit scoring customers to determine whether they would be offered a direct debit option. If they didn't score over 800, no credit was offered. I gather that the score was generated by the finance company rather than a credit reference agency.
     
  8. Malevolence

    Capodecina

    Joined: 21 Oct 2011

    Posts: 17,771

    Given that, I thought I'd check something out.

     
  9. dLockers

    Sgarrista

    Joined: 21 Jan 2010

    Posts: 8,300

    You should reach out to the ombudsman and see if they can help? It might not be an issue now but will certainly bite you in the ass later on?
     
  10. BUDFORCE

    Mobster

    Joined: 3 May 2012

    Posts: 4,088

    [
    You should get a copy of your credit report, just in case. If you what you say is true eg on the voters roll, previous credit agreements and assuming no adverse, I'd be very surprised you got declined.

    I mean, all credit providers have their own criteria, and it might be some silly reason that would be nothing to worry about. Also, this applies for mortgages not sure about credit cards, but with mortgages it's regulation that you can insist a human looks at the decline rather than I would assume the automated scoring system you went through.

    They dont have to give you a reason though, unfortunately, but they might.
     
  11. Diddums

    Capodecina

    Joined: 24 Oct 2012

    Posts: 21,109

    Location: London

    He's specifically said that the agencies reckon he doesn't exist. @Malevolence I suggest you deal with this as it'll bite you sooner or later. Rather get your ducks in a row now than have to deal with it last-second when you actually need it. Email Brian Cassin and explain the situation, he'll put you in touch with someone who can help.

    https://ceoemail.com/s.php?id=ceo-9278&c=Experian-Chief Executive

    Then do the others, I suggest leaving Equifax till last as dealing with them will be less pleasant than rolling off a waterfall in a barrel full of scorpions.
     
  12. Diddums

    Capodecina

    Joined: 24 Oct 2012

    Posts: 21,109

    Location: London

    Step 1: Sign up to the credit agencies and get your credit report for free. Some might charge you a few quid, pay it. Ignore the credit score, that's irrelevant at this point. Make sure you cancel any subscriptions before they start charging you.

    Step 2: Go through those reports with a fine toothed comb. They must be picture-perfect. One single wrong letter in a postcode in an address you haven't lived in for 5 years will screw you, so check every single detail. Basically this is your record that lenders will see, so if you're applying for credit and enter the correct details, if it doesn't match what's on these reports, you'll be in the bin. If you find any errors, contact these agencies to get it rectified. Do this ASAP, as it'll take months for this to be dealt with.

    Step 3: make sure you're on the electoral roll. If you're not on this, get on it pronto. Do not make mistakes on the paperwork, as again it'll take months to fix.

    Step 4: Get a mobile phone contract if you haven't got one. Although not technically credit, it'll demonstrate your ability to pay your bills.

    Step 5: Look at your credit score. If it's anything below "good" on any of the credit agencies, get a sub-prime credit card. These are Aqua, Capital One, Fluid, Vanquis, etc. They'll give you a credit card. Set up a direct debit immediately, to take the full amount out of your bank account every month. Do not use this to buy stuff you can't afford. If you're not 1000% certain that you can control yourself (and be honest with yourself, everyone has impulse buys and moments of weakness, it's nothing unusual) then stick the card in a safe place at home, and use it once a month. A good practice is to use it once a month on a "dedicated day" - this will be a day where you dedicate yourself to buying only what you need, on the credit card, and going home afterwards to put it back in the safe place. Don't keep this card on you, you will have one of those "ah this is fine, I'll pay it later" moments. This is literally what the entire credit card industry is banking on, so remove the temptation.

    Step 6: After at least 6 months (sometimes quicker, but usually closer to a year), your credit card company will offer you a higher debt limit. Take it, don't use it. This trick here is to reduce your debt utilisation. If you spend £200 a month on a credit card with a £1000 limit, that's a 20% debt utilisation. The same amount on a card with a £2000 limit will be a 10% debt utilisation. That's literally twice as good, and that's what lenders will see. Also, the more credit you have, the more confidence lenders will have in you as it demonstrates to them that other lenders have already got confidence in you.

    Step 7: Keep building credit. Build build build. Get another card, maybe two, and just keep them locked away. You never need to use them, but you can however set up the afore-mentioned direct debits with them, and rotate them monthly so they all get used. This again will demonstrate your ability to manage your debt.

    Step 7: Keep monitoring those credit reports. Download the apps (Credit Karma, Clearscore and Experian - I don't think Transunion has an app so check that one manually) and enable your notifications. Every time something changes, you'll get an update so keep them on. Check everything, and check monthly. Make it a ritual on payday.

    Step 8: (I'm making some assumptions here, no offence intended, ignore if you want) learn to manage your money. First off, download your last 6 months bank statements. Go through every single transaction and question everything. Find cheaper stuff, from phone contracts, to energy suppliers, broadband providers, car insurance, the lot. For things like car insurance and tax, you get stung for paying monthly. Save a few quid a month and at renewal time, pay the lot in one go. Use Topcashback for these as you'll get some money there too. This will give you more financial freedom throughout the year and it'll save you money. Next, download one of the fintech bank apps (Monzo or Starling). Set up a weekly standing order from your main account to this account and make that your limit. Once it's finished, it's finished. Learn to live with what you have and don't spend any more. This will save you a ton of money over time as well, and you'll have more money before you know it.

    Keep at it. Keep on top of it, it's a mindset change but it'll literally change your life, and I speak from experience here :)
     
  13. BUDFORCE

    Mobster

    Joined: 3 May 2012

    Posts: 4,088

    Need to go onto royal mail address finder, make sure the address is registered there. Then look at the address the council have down for the voters roll registration, check that matches.

    Then check all that matches the address provided to the lender.

    I mean matches exactly.

    Something like:

    House name
    Flat number

    OR

    Flat number
    House name

    Can cause these issues, if it's a house name (as a pose to just number), Scottish flat address in particular can be tricky with the flat 5/6 etc format.

    These kind of things can cause issues like this, without humans looking, it's not hard to glitch and automated scoring system with these types of things, which to a human is clearly the same address.


    It's very unlikely that if the address exists on royal mail on the vr matches etc it won't be on the credit agencies, occasionally I find these, but generally tends be only be a recently build property with a tenant who isn't planning on staying long and therefore does register anything, if he's had mortgage etc then even more unlikely.
     
  14. Diddums

    Capodecina

    Joined: 24 Oct 2012

    Posts: 21,109

    Location: London

    Spot on, this is excellent advice :)
     
  15. Einskis Nokkur

    Gangster

    Joined: 12 Apr 2021

    Posts: 266

    Location: It is cold here.

    already done it.

    Already done it, they are.

    I am, have been since ever i have lived here.

    read the thread, ive done this. i have an Aqua card on the way and i have set up a pot in my bank account. I will use it for amazon and when i buy something, i will put the money in the pot. its already set on a direct debit to pay the full amount each monht

    thank you. i had set the Aqua card to not accept the higer credit limit. i have changed that.

    i already have donethis

    no need to assume. i do this now.

    Thank you :)
     
  16. LeeUK

    Soldato

    Joined: 1 Mar 2008

    Posts: 5,730

    I was crap with credit cards when I was young (late teens-early 20s etc) and ran up huge debts that went on for years. Then 10 years ago I got in bother with some pay day loans when I was out of work. They are now all either cleared, statute barred, and or fully dropped off my credit files.

    I now have 6 low key credit builder cards, 2 from Capital One (one is branded Luma), Marbles, Tesco Bank Foundation Card, Zopa, and 118118Money. With credit limits ranging from £300 to £2,600.
     
  17. LeeUK

    Soldato

    Joined: 1 Mar 2008

    Posts: 5,730

    Paying it off before the statement is issued is not going to help improve a credit rating. You need to show that you are managing the credit by showing that you are paying the balance off.

    If for example you max that card out on day 1, pay it off on day 10, statement issued on day 30 with zero balance, it's that zero balance that is reported to the CRA and will just look like the card was never used that month.
     
  18. Droolinggimp

    Mobster

    Joined: 16 May 2004

    Posts: 3,800

    Location: Derby

    A few years ago mine was at an all time low, talking 200-300, very poor. Lots of debt etc. Its been creeping up at a nice rate.

    Between the wife and I we have a large debt £36,500. We never miss payments, took a few furlough holidays during last year for a few of them which we needed to do really. We pay £1468 a month on the debts. Don't judge me or ask why we have so much please, this post isn't about that. What it is about is we are doing the Snowball. If we keep at it we will be 100% debt free in June 3rd week in March 2024. We are doing the lowest balance debts first, more of a phycological thing seeing debts end quicker. Over all it adds an extra £2k to the total interest payments.. We will change it to highest interest debts first later next year.

    Just making an over payment of £30 each month to our first lowest interest debt takes off 2 months worth of payments. Adding that £30 with the amount we paid each month for the first debt now goes towards paying the second debt off. This takes 2 months off that debt too.

    The snowball debt calculator is really good.
     
  19. dLockers

    Sgarrista

    Joined: 21 Jan 2010

    Posts: 8,300

    You really need to get over the psychology nonsense. Good job for taking action though.
     
  20. Droolinggimp

    Mobster

    Joined: 16 May 2004

    Posts: 3,800

    Location: Derby

    We are doing it that way to start as within 8 months from now 3 of the debts are gone.. Then onto the big boy debts. I know it's nonsense but it will help us initially. It shows us we are on track and we can do it.