My credit rating must be improving... but its still **** :(

Hedge

Hedge

Hedge

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Hey folks.

When younger I was horrendous with money. Racked up credit cards and a loan, but then I pulled my finger out a few year back and began paying things back.

So now Im down to just a Credit Card owing approx £300 and an Overdraft of £600 (however Im only 100 into that right now)

I log on my internet banking to see Im getting "Loan Offer" from Lloydstsb..

I checked the rates on what I would be offered and it was just over 19% interest on 8k over 5 years (that was just a tester I put into the calcutor on there).

Now its nice that Im obviously trusted enough these days, albeit with a high rate.

Does anyone have experience of getting back on track financially. How long did it take before you began qualifying for good loan rates?

A Mortgage would be hopefully somewhere in future for me.

Ill have the Credit Card cleared on next months wage. Then bring my overdraft down to zero following months.
 
I checked it a number of months ago on Credit Expert and I was scoring just under 800 on their scale, which was just outside the top, but classed as Good if I remember right. Not quite into safest side yet.

Its bloody frustrating that I was foolish with cards back then, missing payments and the like.

I feel good paying 300+ a month off my debt now though. Im tempted to take another 100 or so off but its a bit early in the month to put myself low on funds.
 
Utterly ignore the scales on noddle and CreditExpert they don't really mean anything.

In general your credit rating is measured differently by different lenders so unless you're aware of their modelling then there's no way to predict.

Each lender makes an assessment of the likelihood of them getting their money back, so really *you* are the best person to assess your credit rating really.

Credit can be a never ending trap that can weigh people down for years on end, even though they appear to have a great credit rating.

History will drop off after 6 years anyway. Maintain a clear history for 6 years with all payments met etc. and your rating will improve. 6 years of minimum payments on high debt on credit cards for example would still not be that attractive to new lenders though I wouldn't have thought, certainly for unsecured stuff.
 
I think you are probably talking a lot of sense to be honest Mac.

Whats the best way I should do things to get it back good. Should I clear my debt completely then start a savings account?

I pay phone bills and whatever. I dont know if that has much effect.

Im looking forward to a payrise next year which should make me more a bit more appealing to lenders too.

I feel kinda stupid wanting to improve my credit from loans... to qualify for better loans. But life aint easy without a bit of debt.
 
I was in a lot of debt on cards + loan but paid most of it off myself and am left with 500overdraft and a loan of 900. My credit is proper buggered as well 1/5 on noddle still :( heard getting a credit card and using it but paying it off in full every month helps build it back up abit
 
I cut up my credit card at the age of 22. Took me another 8 years to pay all my loans and credit off. I'm 36 now. I have one loan for a car and that's it. I have a debit card now only and I keep in the black, if you think you need a loan for anything that is not significantly expensive (i.e. car, house etc), then just bite it and start saving.

These things are here to shaft us. You do not have the right to live beyond your means, and often the items you purchase with them will be long gone before the credit is. ;)

I shall save my good credit rating until just before I die, then I will take all the loans I can get and shaft the *******s back ;)
 
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to be honest i am glad i kinda messed it up while i am still young and can get support from my parents easy enough rather than getting older than i am (25) then finding out about it when i have a car / house ect that i cant cut back on to pay off debts once i am out never going back in unless its for a house
 
Whatever you do, don't take out a card with Mint if you want to maintain a credit rating at all. They make the rules up as they go along...
 
I had a very dodgy few years, but I think I am now 999 on credit expert.
make sure you are on the electoral role, move debt around to 0% deals and pay off more than minimum on the largest debt.
the debt will start to fall off and you will feel a lot better
 
MacRS4 said:
History will drop off after 6 years anyway. Maintain a clear history for 6 years with all payments met etc. and your rating will improve. 6 years of minimum payments on high debt on credit cards for example would still not be that attractive to new lenders though I wouldn't have thought, certainly for unsecured stuff.
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I would have thought it would be *very* good for your credit rating. If your always making your payments, but never actually paying off much more than the interest, your baiscally guaranteed income.
 
Woden said:
I would have thought it would be *very* good for your credit rating. If your always making your payments, but never actually paying off much more than the interest, your baiscally guaranteed income.
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It seems most of the time its what your bank balance is not what you owe. Incase you ever go out of work then say i cant give you anything as i have no income but if you got plenty in the bank they tend not to worry as much
 
Yeah the scores mean nothing (and the automatically offered stuff by the bank isn't really an indication of anything either). Talk to your bank or preferred lender directly if you want good rates and don't assume that people that pay back on time, every time and have a great financial history are necessarily their preferred customer. People with slightly rocky histories (but not too rocky) are often likely to be repeat "customers" and can often be charged slightly higher rates, etc. (down the line).
 
bum said:
I've just checked myself, it's 4/5.

Never took a loan out (except student loan) nor had a credit card. Was expecting 5/5:o
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Well, it's a rating of your credit worthiness, that extra point is probably you proving that you are able to handle and repay credit properly. Seeing as you haven't had any credit in order to repay it, that's where you lose the point.
 
D18241 said:
It seems most of the time its what your bank balance is not what you owe. Incase you ever go out of work then say i cant give you anything as i have no income but if you got plenty in the bank they tend not to worry as much
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Really depends what you're trying to borrow.

In my business (admittedly business) we won't finance a company that's near the limits of their lending from multiple providers and are not trying to play down debt. The risk is too high.

Saying that I realise there's not always a complete science to it. While I've no missed payments or defaults on my report there are multiple mortgages and the odd 20k credit card debt - all work stuff so all regularly paid off - it really comes down to the risk assessment of the lender.

Trying to borrow HP against a 20k car for example is a different risk profile against somebody trying to borrow 20k unsecured in cash.
 
Also, positive cash won't affect your credit report at all. Having 15k of debt and 40k in cash just means you're 15k in debt.

Cash rarely holds benefits when you're in debt, although personally I've often bitten a chunk of interest to maintain a buffer of personal cash in the bank.
 
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