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Credit rating

Discussion in 'Personal' started by chloejewel, Jun 12, 2011.

  1. chloejewel

    chloejewel New commenter

    Hello everyone,
    I've recently signed up to a credit-rating website to look at my record and credit score. My rating has been reported as 498.
    About 6 years ago, I split up with my partner and found it very difficult to pay bills etc. Stupidly, I ignored the demands, only paying the minimum on the final, final demand. This went on for a few months before I moved into very cheap houseshare and began to get back on an even keel. At that time, I was permanently up to the limit on my overdraft and credit card, owed on a storecard and had a car loan.
    I am now firmly (£1500+) in the black in my current account, fully paid off my credit card and no longer use it, paid off and do not have store cards and paid off my car loan four years ago. I now have a car finance, paid monthly, and have a perfect record of payment. I pay my car insurance annually and my mobile phone contract monthly.
    Now, given my past record, I didn't expect a perfect score, but 498 seems particularly low! The credit report was all correct and there were no surprises, just a series of green ticks to show that I have met every payment for my credit commitments over the last 12 months.
    I'm going to be looking into getting a mortgage in the next year or so. What can I do to improve my credit rating and get the very best interest rates (or get a mortgage at all!)?
  2. The first mistake was signing up for a site that gives you a single score. There is no such thing. You could be given 999 and it would mean absolutely nothing.
    Just make sure you continue to use credit cards and pay them off to build up a history.

  3. chloejewel

    chloejewel New commenter

    Thanks for replying, pinkflipflop. Does it look better if I put a small amount on my card each month and pay it off, rather than just leaving the card unused?
    Out of interest, why is there no such thing as a single score?
  4. Yes. Unused credit is not good for your credit history. The bank will never know if you will suddenly decide to use up all the credit in one foul swoop and then stop paying.
    There is no such thing as a score, as every company will be looking for different aspects of your credit history when considering what to do. For example, having too much available credit and not using it is a no go for many companies.
  5. chloejewel

    chloejewel New commenter

    Wow, obviously I have completely misjudged the situation. I just assumed that less credit used= better rating. Thank you for the information!
    Are some mortgage providers more lenient/harsh with their judgements?
  6. Banks will have different criteria that changes regularly depending on the market.
    Could you close down any unused cards or reduce the limits on the ones with balances?
  7. chloejewel

    chloejewel New commenter

    You're like the fount of credit-rating knowledge!
    I only have one credit card and have £0 owing. I have brought the limit down from £1500 to £300.

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