Credit Ratings

[easyasit]

Hi guys

now i realise this forum contains possibly some of the finest legal, accounting, and business brains online.
My issue.
Can someone tell me how the credit rating system works?
How does one improve their credit rating?
Does it remain poor even wen debts are being paid off?
These reports from experian only tell me who i have burrowed from, but i cannot make head nor tail of anything else on it

A little advise would be great.

So to clarify, how does one improve their credit rating?

In advance i thank you for your advise.

Many thanks

Al

 

[DuaneJackson]

Try out the service from Equifax (www.equifax.co.uk), it's much more comprehensive than Experian and they also show you a credit score.

It's important to remember that these companies don't provide a credit score to anyone that checks you out. They just provide your data (As you've already seen from Experian). The company doing the check then evaluate the info (albeit programatically) against thier own scoring system.

It's relatively easy to improve your credit rating, it just takes times.

Get a report fom Equifax and you'll see what you need to improve.

For instance,

make sure youa re never late on payments
Don't make too many credit applications (>2) in any 6 month period if you can help it
Make sure you are on the electoral roll at your current address, etc.

In short, find out what is givng you a bad credit score, and rectify it.

Having said that, if you've ever been bankrupt then it's hard to do anything about that.

I'll shut up now so the fine legal, accounting and business minds can have their say.

 

[bwglaw]

Whilst I do not proclaim to be a finance expert I do in fact scrutinise my own credit reports and have given advice to friends how to go about improving them.

One way to improve them is to check for any incorrect data. Check that any debts mentioned, including late payments are indeed correct. Check that any debts registered are legally entitled to do so. Some creditors use the system incorrectly and use it as a means of instead of going to Court.

You are entitled to file a Notice of Dispute online if you buy the report online. I have used this several times and have been successful on all but one dispute and I have noticed an increase in score.

Do credit ratings remain poor even when being paid off? A hard question to answer but generally the credit rating system will report on the performance of payments and will record any late payments.

To ensure a good credit rating it is advisable to scrutinise as above and to ensure you pay bills on time, even if it is your contract mobile phone bill. Do also bear in mind that each creditor have different policies when to lend or to agree to a credit agreement. Your report may be accepted by one lender but rejected by another.

I would be happy to advise you on your credit report in confidence.

Jonathan

 

[Ozzy]

This may sound odd, but one way of improving your credit rating is to have a credit card and use it occasionally and not being late on any payments. For example clear it every month. I have a friend who did this to improve his credit rating and before long he started getting loads of jumk mail offering him credit cards right left and centre (a sure fire way of knowing your credit score has improved)

 

[easyasit]

the reason i ask is in the past i had issues.
In short i was not making enough money to make reg payments on my bills.
Credit rating got shot to pieces. Even effected my now ex.

So here i am making reg payments, more if i can muster it. No longer the min agreed payment but what i can afford and its being debited. So i can only imagine that creditors must be happier to see this as i must now be little different from most other ppl.
Then there is the issue with house moving. I move around a lot. Creditors want to know where u have lived iun the past so many years. For me this list is getting longer!

However a bad credit rating is blasting my chances of renting a home, buying a car, getting a mortgage. So wanted to know the best way of sorting this out.

Thanks again for ur advise

Al

 

[bwglaw]

This may sound odd, but one way of improving your credit rating is to have a credit card and use it occasionally and not being late on any payments. For example clear it every month. I have a friend who did this to improve his credit rating and before long he started getting loads of jumk mail offering him credit cards right left and centre (a sure fire way of knowing your credit score has improved)

I heard that also until I got a newsletter from Equifax saying not to go out there and get a credit card unless you need one. It is very true that many creditors want to see that you can manage credit

Jonathan

 

[bwglaw]

Al - although you are improving your situation unfortunately any correct data will stay on the file for 6 years

Jonathan

 

[DuaneJackson]

Al,

You're a step ahead of most others. They don't realise there is a problem or that they can do anything about it for ages.

Carry on "behaving" and your rating will improve. Do check your record for anything incorrect though as Jon says.

And stop moving house!

 

[Gillie]

Its not impossible to get loans/mortgages if you have a bad report. I recently obtained a mortgage for someone with an IVA, its just the interest you have to pay with more than likely be around the 7% mark as opposed to the 4.7% upwards for someone with A1 credit!

Get a copy of your credit report check and make sure all entries and yours firstly, and dispute those that aint should there be any.

If you have bad marks on it, ensure if are rectifying them, that this is noted too. And thereafter, make sure you make your payments on time, as defaults are noted on your report.

To improve your rating, ensure you are on the electoral register, dont forget to when you move house!

And lastly, everyone (banks/lenders) have a version of credit rating ... ie none have exactly the same criteria, whilst one will place importance on having a landline and length of time in a house, others will rate something else higher .... there is no set version of it, all have their own, with the basics on it such as past history and voters roll.

If your rating is affecting someone else such as an ex, then they need to disassociate themselves from you financially, ie letting the powers that be that you are no longer a couple .... this will then improves your exs chances too!

Hope this helps .... smile .... there is hope!

 

[Cornish Steve]

Your credit rating means just about everything in the US. The trouble is, when we arrived here, we didn't have one! It meant we couldn't get a credit card, couldn't buy a car, had trouble renting a house, and so on. The secretary in the office sat me down and gave me some frank advice. It was very helpful:

1) Buy something on credit. Anything. Then pay off the loan in a timely manner. In our case, we bought furniture, with my employer acting as a reference.

2) After about six months, you have a rating. Now you have to build on it. A good one is to buy a car. Again, be sure to make all payments on time.

3) A mortgage is another good one. Don't purchase beyond your means, and be sure to never be even one day late.

Now, after 20 years, I'm inundated daily with credit card offers. I take great advantage of this, as I have mentioned in other posts, using zero percent offers to fund my business venture.

It's unfortunate, but your credit rating is becoming one of the most important numbers in your life. It's worth getting the little things right because this opens many doors.

Once a year, check your credit file with Equifax or one of the other agencies. Sometimes they get things wrong and leave closed accounts open. This works against you because it hurts your rating to have too many accounts open at once.

 

[TheIntroducer]

I've never been a great fan of the hypocrite Martin Lewis, but his Moneysavingexpert website does have one or two commendable articles about credit ratings

 

[easyasit]

Some excellent advice there ppl, thank you all

Al