How much will my credit rating go up or down? That is a very common question. But it’s often tricky to answer!
This article has some guideline numbers from Experian that may help.
These are only indications – your credit score may not go up or down by this much.
They assume nothing else has changed on your record. They also apply to single issues. If you have two defaults already, getting a third won’t be as bad … And if one of your three defaults then drops off after six years, your score won’t improve as much because there are still two remaining.
If your main concern is wanting to get credit at a good interest rate, what matters is how each lender will assess your credit history. Lenders don’t actually use the calculated credit scores! So I’ve added some notes about how lenders tend to think about these situations.
Contents
How balances & credit utilisation affects your credit score
“Credit utilisation” shows how much of the credit limit that you are using at the moment. If you have a limit of £5,000 on a credit card, your utilisation would be 20% if your balance is £1,000 and 80% with a balance of £4,000.
Credit scoring gives you extra points if you are using a low amount and deducts points if you have a high utilisation. All the numbers in this article are from Experian:
- if your balance is under 30% of your limit, you gain 90 points.
- a very low balance is even better – less than £50 or zero will gain an extra 60 points – so that’s the boost you get if you clear your balance each month.
- using over 90% of your limit loses you 50 points.
- a very high balance of over £15,000 will lose an extra 50 points.
The size of the limit itself also affects your score, but not by as much:
- A high limit of over £5,000 adds 20 points to your score
- A very low limit of less than £250 loses 40 points.
Is it the utilisation for each card or overall that matters?
It’s both! So getting the utilisation for one card below 90% – or even down to zero – won’t have major effect on your credit score if you have large balances and over 90% utilisation on your other cards.
What do lenders think about credit utilisation?
Most lenders don’t like you to have maxed out your credit cards, it suggests that you are struggling, so why would they want to lend you more? Do some lenders prefer you to have a balance, not clear your card each month? That may be an urban myth…
Lenders usually have an extra piece of information here that doesn’t show on your credit record – your income, because you will typically have been asked for this on your application.
If you have one credit card with a low limit and you are using most of it but your income is high, you can probably get car finance at a good price. But if you have borrowed a lot compared to your income you are going to struggle to get offered more credit at a good rate.
Does overdraft utilisation matter?
Experian doesn’t factor this into its calculations. Some lenders may… But this is a number which for many people goes up and down a lot every month, so a snapshot at any point in time may not be that interesting.
The effect of missed payments, defaults & CCJs
- A missed payment on a bill or debt would lose you at least 80 points.
- A default is much worse, costing your score about 350 points.
- A CCJ will lose you about 250 points. For most CCJs, there will already be a debt with a default on your record, so this hit is in addition to the harm caused by the default.
It doesn’t matter how large the size of the problem debt is. A £25 mobile bill has the same effect as not being able to make the repayments on a loan of ten thousand pounds.
These problems are seen as less serious if they are older. Once a default is more than two years old, the negative effect falls to 250 points, then when it is over 4 years old it drops a bit more to 200 points.
These hits to your credit rating aren’t reduced when you start to pay the debt, or even when it has been fully repaid. (There is one exception here – a CCJ is deleted completely if you pay it in CCJ in full within a month of the judgment.)
What do lenders think about defaults?
Lenders vary a lot in their attitude towards defaults:
- high-cost lenders such as payday loans and guarantor loans won’t automatically reject your application if you had a default a couple of years ago, even if it hasn’t been repaid – they are targeting people with bad credit;
- you may be rejected by some best-buy balance transfer deals if you have any defaults or missed payments, even if these are old and repaid;
- some mortgage lenders will reject people with any defaults, repaid or not, but others may offer a reasonable rate of interest if your defaults are old and they have been settled for a while.
Four small wins
Once you have big problems on your credit record such as defaults or CCJs or an IVA, only time will get rid of those “black marks”. You can’t speed this up and often the key thing is to stop any new problems being added.
But here are some small ways to boost your credit score:
- Stop applying for credit! Not making any credit applications for 6 months adds 50 points to your score.
- Keep a credit card for more than five years. This adds 20 points to your score. But if you are trying to decide which card to close, always keep a card with a lower interest rate – that’s more important than 20 points on your credit score.
- Register to vote. It’s a simple way of adding 50 points to your score.
- Pay for car insurance in monthly instalments. This can increase your score by 20 points. But do check what your insurer charges. See Avoid insurance rip-offs – many people are paying over 26% interest to pay monthly, with some firms charging over 50% so this can be incredibly expensive!
Three things that DON’T affect your credit score – are you surprised?
- checking your credit score – this doesn’t affect your credit score and lenders can’t see that you have done this either.
- paying off a debt that has defaulted. Most people don’t believe this, but it’s true… your credit score only looks at what has gone wrong in the past, not how you are trying to put it right. But of course, repaying the debt prevents any chance of getting a CCJ, which would mess up your credit score for another six years… See Will paying a default improve my credit rating? for details.
- Someone else at your address having bad credit. You are only financially linked to someone you have a joint loan, mortgage or current account. If you aren’t, it doesn’t matter how many letters from debt collectors arrive if they aren’t for you. Have a look at your credit reports – those problem debts won’t be showing.
Equifax and TransUnion – the other two credit reference agencies
This article has been all about Experian’s credit score calculations.
Equifax and TransUnion are the other two major credit reference agencies in Britain. They have broadly the same approach as Experian, but their credit scores have a different maximum (if you think this is bonkers, I agree!):
- Experian’s maximum score is 999
- Equifax’s maximum score is 700
- TransUnion’s maximum score is 710.
So a change to your score for any particular factor is going to be smaller on Equifax and TransUnion than Experian. And a 500 score on Experian is poor but it’s good on Equifax!
The major lenders like the big banks report to all three credit reference agencies. But smaller lenders may only report to one or two. So you may find that your scores and reports are very different on different reports.
If you are worried about your credit score you should check all three credit reference agencies. Luckily you can do this for free, see The best ways to check your credit score.
Improve your credit score for a mortgage
How to use a credit builder card
What should the default date be?
Liam Attrill says
I’ve just spoken to Moriarty Law and found out the original creditor with them was Swift Sterling. Where would I need to send this complaint please?
Sara (Debt Camel) says
would these loans have been pre 2016?
liam attrill says
Yes, they would have been.
I’ve just been through my emails going back to 2011 and found various payday loans I took out. Most were one or two times only before defaulting. The majority of these companies are now in administration.
How far back can you claim?
Sara (Debt Camel) says
In general you can go back to April 2007 but one or two loan claims are hard to win. And if the lenders are in administration this is probably pointless.
The Swift Sterling you borrowed from was a Malta-based company and it is no longer possible to make a claim to them. You could ask Lantern to produce the CCA agreement for this loan and a statement of account for it. I don’t know if they will be able to. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/
How much do you owe at the moment, across all debts? What is your current financial situation like?
Leigh says
Hi Paul
Can I ask what your score was with Experian before you paid your defaults as I’m having the same issues myself my score is very low only 203 points but I’ve just had my ccj set aside and it’s been paid in full so I’m hoping this makes a difference soon I’ve also got a loqbox as well as credit ladder bits and Portify so I’m hoping I will start to get somewhere i currently have ten defaults 4 have been settled so u know roughly how many points my score will go up once the ccj comes off
Sara (Debt Camel) says
Sorry but with 10 defaults your score may not go up that much. When do they start falling off?
Leigh says
Most of them are dated 2016 to 2018 I have been saving and paying off each one at a time I managed to get the ccj set aside this week
Sara (Debt Camel) says
Paying off the defaults doesn’t actually improve your credit score – but at least it stops more CCJs.
Have you looked at making full and final settlement offers to speed this up?
The 2016 ones will be dropping off next year sometime. Your score will be improving from here, it can feel like a long haul but you will get there if you can stop any new problems from appearing.
Leigh says
I haven’t looked at doing settlement offers does that work what’s the best way forward with doing that yer I wish I had sorted this out years ago I just wasn’t in the right place financially at the time but now I own my own business I have the funds available to get it done
Sara (Debt Camel) says
Read https://debtcamel.co.uk/debt-options/less-common/full-final/.
Just be proud of yourself for moving on, regrets don’t help this.
Liam Attrill says
It looks like the majority are old and in administration.
I’ve put the complaint to FOS for the two Morses Loans, so waiting to hear from them. Both of those defaults will drop off in March. I have two other defaults that are now satisfied.
In a couple of months all my credit cards will be below or at 25% balance. I will then just pay these off monthly.
Credit Cards Limit Used/Total:
6 Cards
1220 / 4900
Is it better to clear these down gradually? I do use them to pay off bills when at 25% so I don’t incur interest. Marbles did offer me an £750 increase and then a promotional 0% money/balance transfer offer some months back, that I used to help clear down some credit cards then paid this back.
The main aim is to clear my wife’s likely loan Balance £3,144.79 Settlement £2,375.26 at 89.9%. We have put in an affordability complaint.
In total we have 3 loans that I would like to clear. the two 118 loans are ok.
We have £1000 now and I may have access to £1300 in April that I could also contribute to my Credit union account and then maybe look to borrow against whatever savings we have to clear the above loans, depending on interest rate offered by the Credit union.
If there are any better routes to take, feel free to let me know :)
Many thanks,
Liam
Sara (Debt Camel) says
Your credit rating will do best when you get the credit cards down to zero and repay them in full every month. there is NO advantage to clearing them gradually.
By April you will have enough money to settle the LL won’t you?
Are you sure the 118 loans were affordable?
Liam Attrill says
Ok great, thanks! I know what to do there then. I will clear the balances where I can each month and leave the capital one balance (with the lower interest rate) as the one I will have to clear down month by month.
We will potentially have enough to clear the likely loan. If we don’t, then we will only have about £1000 plus any other potential claim refunds (although not that hopeful, as just waiting on Morses with FOS, which could take some time and Loans at home for myself and my wife).
If we only have £1000 then again, I will have already banked £1000 as soon as provident cheque clears, I could then potentially request a loan with the credit union or, if I get a potential offer with Marbles again at 0% for 6 months (if that happens).
Christopher Snow says
I have a messy issue that needs clarification & help
I had a old barclaycard account that went into default in 2015 when i lost my job.
Since then barclaycard sold my debt onto a robson way/ hoist finance and has turned into a CCJ & defaults on my account now named from barclaycard to hoist finance.
What would be the next step in sorting this out & getting my credit score back up?
Sara (Debt Camel) says
You haven’t said anything which suggests that you have a reason to challenge the CCJ and default.
Had Barclaycard raised your limit to a VERY high level where you could only make minimum payments even before you lost your job?
Paul says
Hi
Happy new year. I wanted to give an update and ask a further question. From my original message in this thread (https://debtcamel.co.uk/credit-score-change/comment-page-4/#comment-3783782) I paid my 3 defaults (I got a 50% discount on all 3), once they showed as paid on my credit files I was offered a ZOPA credit card (limit £200), I accepted it and have only ever spent 25% of the balance monthly and always paid in full. I have also opened a LOQBOX. My Clearscore has gone up by 95 points. In July it was 223 and today it is 318. My Moneysupermarket and Karam score has gone up by 36 points. I am very happy.
Last week on Clearscore I was offered a 118118 credit card with a limit of £1200. I have read that it is better to have a larger credit limit as it shows you are able to manage money better than having a small limit. I accepted the 118118 card and again I plan to only use no more than 25% of the limit (it will be used like my ZOPA card in that I will use it for fuel in my car and nothing else).
My question is, now I have X2 credit cards should I cancel by ZOPA one and just keep 118118 as that has the higher credit limit or should I keep both (would keeping both be a positive or negative on my file?). I am in a financial situation where keeping both and spending a max 25% on both would NOT impact on my disposable income
Sara (Debt Camel) says
That is all good progress!
I would close the Zopa card, it has helped you so far, but a low credit limit isn’t good (see article above) and now you have another card with a limit over 1k that will be better to carry on with.
Paul says
Thank you very much
Liam Attrill says
Hi Sara,
So, in response to this, my oldest card is an Aqua card that is about 4 years old but only £100 limit. Am I better off closing this account? I only use £20 that i clear each month.
Many thanks,
Liam
Sara (Debt Camel) says
if you have other cards with no payment problems and higher limits, then closing that small one is probably a good idea.
Liam Attrill says
Ok, thanks, will do.
Paul B says
I am not sure how you work out these points. If you have two CCJ’s and 8 defaults on 8 Credit Cards. That would suggest 2 x -250 and 8 x -350 which is -500 – another 2800 points. Well as the score is 0 to 999 then i don’t see how on earth you come up with these amounts..
Sara (Debt Camel) says
They are the effect is some with an excellent score gets 1 default. Or 1 CCJ etc.
You can’t just add them up, as you have pointed out.
So if you have 8 defaults and one drops off your credit score, it may not go up much as you still have 7 of them left.
The amounts were given to me by Experian – I didn’t invent them.
Rachel Dormer says
Hi there ,
I am really stressing out as in the next year I want to get a car loan however I have 2 defaults 1 at 3 years old and one at 2 months old I have an Experian credit score of 355 what is the likelyhood of ever getting accepted
Liam Doyle says
I had a bad credit rating when I applied to Moneybarn for a car loan. I was approved for £10000 at 19.9% interest. I would leave it as long as possible before you apply seeing as you have a default that is only two months old. Try and get up to date with your commitments before you apply and you will stand a better chance.
Rich says
I also had success with moneybarn. They said I could go up to 22k at 29%. Found a car for 8k. That’s with 12 defaults AND a ccj from early 2019. That was May last year so over a year but still with recent missed payments. Just made an extra £600 payment and reduced interest by £900 over finance term so well worth paying extra if you can as the interest is a killer.
Rich says
Note – my Experian was less that 200 at the time
Weatherman says
Hi Rachel
I’m afraid there’s no easy answer to this! Different lenders will have different criteria. With two defaults on your file you’re going to be looking at more expensive car loans if you’re able to get any, I’m afraid.
You could use an eligibility calculator like this one to try to give you a better sense before you make any formal applications: https://www.moneysavingexpert.com/eligibility/loans-calculator/search/
Sara (Debt Camel) says
I agree with Liam that you should leave this as long as possible before applying and pay off the defaults before hand.
Rich did the best thing in going for a much cheaper car that the one he was offered finance for.
I suggest you think now what you will be able to sustainably pay every month. Say that is £250. Then for the next 9 month set yourself the target of paying an extra £250 off the defaulted debts or saving up that money somehwere you will not touch it. If that is hard, you need to look for a cheaper car to get the loan cost down. If it’s OK, don’t be tempted to go up to £300 – £50 a montne xtra may not sound like a lot but over several years it can be hard to manage.
Nicole says
I have a very poor score due to several defaults spanning the last 4 years. I have 5 defaults from 2017 these are all with DCAs – which I am going to ask for the CCA and if they provide then partially settle – if they can’t then I have no need to settle and they will all be off my report by 2023 – I have another 2 defaults from 2018, 1 from 2019 and 2 from 2020. Am i better trying to partially settle all of these – or only partially settle the oldest ones and fully settle the ones from 2020? Would either even make a difference in my credit score? I’m hoping that in the next few years I could have at least a average score!
Weatherman says
Hi Nicole
First of all, the defaults will stay on your file for 6 years whether you pay the debt in full, in part, or not at all.
If you manage to settle (whether partially or in full) all of your defaulted debts, that’ll look better to a lender than still having outstanding debts. Paying the debt in full if you can afford it will look slightly better to a lender, although the difference might not be huge and it’ll vary from lender to lender. So I’d start by seeing what you can afford – you could pick the largest debt and start there, as what happens with that debt will have the biggest impact on your remaining ‘settling budget’!
Whether the debts are settled or not won’t change your actual *score* as the debts have defaulted – but that’s not what lenders use anyway. They look at the information behind the score; the score itself is just to give you an idea of how you’re doing.
Nigel says
My credit has decreased my 2 points, but should have increased significantly because 2 defaults and a few missed payments just got removed and no other changes .
Plus I have no other defaults ccj or anything
How can I find out why it got worse
Checked on credit karma
Sara (Debt Camel) says
Did any debts that didn’t have problems on them get deleted?
Did your credit utilisation increase for any credit cards, catalogues or overdraft?
Nigel says
Two natiownide ones are no rewritten
Credit utilisation has decresed
Sara (Debt Camel) says
No idea. But your credit record is clearly very complicated – you have left more than 70 comments on more than 10 different pages over a period of more than a year.
I suggest that you settle down to repaying your debts from your overtime as quickly as possible to improve your chances of a mortgage. It may be a good idea to talk to a mortgage broker who can look at your credit record with you and talk about a mortgage application at some point.
Isabel says
I had 4 ccjs and 3 default accounts. All are paid now, they were paid off in December 2020 and my score has gone from under 100 to 475. I signed up to Bits as I read it is a good way to boost your score plus experian boost. Is there anything else I could do to increase my score.
I am on the electrol role and ensuring all other bills are paid on time.
I now have savings, enough for a 10% deposit and I want to buy a home, is it likely I will be accepted
Weatherman says
Hi Isabel
When were these CCJs, or for debts that didn’t have a CCJ, when were the defaults?
The nearer they are to six years old, the less likely they are to terrify a lender. But if you have quite a small deposit, you might still have difficulty finding a lender who’ll take you. You could speak to a broker who specialises in mortgages for people with bad credit histories – or wait until some/all of the negative markers have dropped off your credit report, which will be six years after they were put on.
Don’t forget that your lenders won’t look at your *score* but at the information that sits underneath it. So tools like Experian Boost might improve the score that you see, but might not improve your chances with lenders – it all depends on how they interpret the data. If a lender just isn’t interested in, for example, your council tax repayment history, it won’t affect your application with them, even if it increases your ‘score’.
Sara (Debt Camel) says
The debts have only be paid very recently. Many lenders prefer problem debts to have been settled a year or more before an application.
And many don’t like CCJs at all, even repaid ones.
Your problem is that 10% isn’t a great deposit at the moment, so the lenders are being fussy about who they will accept.
As Weatherman says, Boost may increase your score but mortgage lenders don’t look at the experian score, just at the credit record data. Same applies to Bits. I’m not convinced Bits is worth paying for at all for you. These things can work well if you had an “empty” credit record with nothing on it, but your probalm is the CCJs and defaults and that is what a mortgage lender will care about.
How old are the CCJs? What are the default dates on your credit record?
Laura says
Hi Isabel
Sorry to bother you , can I ask how old your default and ccj I am in almost the same situation , I have 3 defaults and two ccj that are between three years old .and four years old. I received some money from my parents to pay off all of my creditors . I am saving for mortgage and my credit score is just over a 100. Hopefully I will have the same impact as your credit file.
Isabel says
Mine were about the same, 3 years old. I’m hoping over the next year mine improves further now everything is paid off and all other bills paid on time. We will have enough saved for a 15 maybe 20% deposit this time next year so I’m feeling hopeful
Sara (Debt Camel) says
you will struggle to get a mortgage at an OK rate with CCJs on your credit record. A good broker can sometimes find a solution if there is just one, old, tiny CCJ which was some sort of mistake – but several CCJs and defaults don’t come into that category.
Craig says
Hey there,
I’m in a similar position to you except a little further on with fixing my credit. The impact of your car coming off will be minimal if you aren’t actively paying everything bills on time and clearing debt. J wasn’t doing that when it came off and my rating stayed at around 100 until I paid off my 4 defaults that still have 1 year till they come off. Also started paying everything on time for the last 10 months and my experian is @ 300ish and clearscore is at 280 now. Have now finally been accepted for a credit card that I also pay every month in full and plan on buying a house in 2022/23.
Adenes says
Hi l have a active CCJ after 11 years ! Can you help to understand how can it be possible!? And how many years to be definitely cleaned from my recording?!Tks
Sara (Debt Camel) says
11 years after what, the date you took out the debt, the date you defaulted on it, the date of the court judgment?
Were you aware of this before or have you just seen it on your credit record?
Atik says
I would like to share my recent experience and I want your advice if possible please .
I had one CCJ (£2,203) in 2017 . I applied for set aside in last September. Judge allowed my application and gave me 28 days to reply . I paid full amount and court issued me ” Certificate of cancellation CCJ” . Now ccj is not exists on my credit file as it has been totally removed ( I checked through trust online)
I do have another 5 defaults.
Capital one :£256 ( Defaulted 2019)
Credit card :£595( Defaulted 2019)
Credit card : £550 ( Defaulted 2019)
Halifax over draft : £3500 ( Defaulted 2017)
Halifax credit card : £2000 ( Defaulted 2017)
If I pay to first three companies ( Apart from Old Halifax Default) with 50% discounted rate ( Default will be partly satisfied)
Will my credit score will improve ?
At this money
My credit score is
Transunion-517
Clear score -283
Equifax-255
Please give me some advices if possible. Thank you ever so much in advance. 🙂
Weatherman says
Hi Atik
Even if you settle the debts, the defaults will stay on your record for six years. And it’s the defaults that really do the damage. They do less damage the older they are, but even a five year old default will have a negative impact unfortunately.
However, settling the debts will mean no risk of a CCJ for those debts – which would stay on your file for another six years.
Your credit score is just a guide to you of how well you’re doing. Lenders look at the information underneath the score, and assess it against their own criteria. So don’t get too hung up on the score itself!
Sara (Debt Camel) says
Paying a default won’t improve your credit score. It doesn’t matter if it is paid in full or partially settled.
But it will mean you can no loger get a CCJ and you won’t have to deal with debt collectors.
Also many lenders may be more prepared to lend to you because the debts are settled. As Weatherman says, lenders don’t use the score you csee, they have their own rules.
Matt says
Hi
If I cancel a credit agreement within the 14 days cooling off period. Will this still show on my credit report?
Many thanks
Sara (Debt Camel) says
Sometimes it won’t, as you have cancelled before it is reported, But if it does, it shosuld not show an open balance. See https://www.checkmyfile.com/articles/your-rights-when-cancelling-a-new-credit-agreement.htm.htm
Katrina says
Hi
Looking for some advice. Back in 2015 my husband lost his job and we found ourselves in financial difficulty. It was suggested by CAB to file for a DRO. 4 of my accounts were put into the DRO in July 2015. My credit file shows that I had a DRO in 2015 (it shows 2 accounts settled and 2 accounts unsettled-this hasn’t changed since). I have 21 weeks before this comes off my credit file and now we are in a much better position and looking forward to getting onto the property ladder. I know this is still not going to be straight forward, but we must remain hopeful. When this drops off of my file how much is my credit rating likely to go up? This is the only debt I have ever had and everything has been good since. I have looked through some of these posts and I have read having a low limit credit card can be bringing the score down. I have a Capital One card with only a £200 limit. Is this something I should see if I can higher? Any advice would be much appreciated. Thankyou.
Sara (Debt Camel) says
That sounds like a huge improvement from 6 years ago!
Yoru credit rating should go up a lot if all the debts in it have default dates on or before the date your DRO started. Have you checked if that is the case?
Katrina says
I have had a look on checkmyfile but it all confuses me slightly. From what I can see is that my DRO was filed in July. 2 accounts defaulted in May and 2 accounts not until the september.
Sara (Debt Camel) says
ok so after your DRO itself goes, a couple of the defaults will remain until September this year? In that case your credit record won’t completely recover until then.
You can ask those creditors to change the default date to July, see https://debtcamel.co.uk/repair-credit-record-dro/. Or you may decide for 2 months difference you don’t need the hassle…
Katrina says
Thankyou. I am going to look into this and hopefully get it corrected. As for highering a credit limit can I just contact the credit card lender?
Sara (Debt Camel) says
Yes you can. You only need the limit increased to say £400.
Liam Doyle says
I went from a bad credit rating in 2019 to an excellent rating now. I had a CCJ which went off the radar late last year. We were able to remortgage our flat and consolidate our other debts, which meant I could cancel my high interest credit cards, and now only have two 0% cards. It is doable but can take time.
charles says
I have a debt of £3500 which will be 6years old in 2 months time.I have been offered a partial settlement pla which is affordable . Do you think its advisable to take it or slowly pay as i have plans of mortgage in two years time.Again I have CCJ which is 4 years old which i found out only last month as i had moved from an address they were communicating me to.Can i challenge and have it removed and pay fully as the debt is only £235 and couldn’t pay due to issues I had in the past.
Thanks
Weatherman says
Hi Charles
If you’ve been offered an affordable partial settlement, I don’t see why you wouldn’t take that. in 2 months the debt will be off your credit report (so the lender won’t see it, or its status), and you won’t owe the debt (the lender might ask you if you owe *any* debts, even if they’re no longer on your credit report).
You can’t challenge the CCJ if you moved house but didn’t tell your creditors. If you pay it, there’ll be no risk of enforcement action (e.g. bailiffs) about it, and it’ll drop off your credit report 6 years after it was made.
Sara (Debt Camel) says
what sort of debt was this £3500 ? has it been sold to a debt collector? are you making payments to this?
how low an offer is this?
Katrina says
Hi
A few days ago I posted on here about having a DRO back in 2015. I had a few accounts, 3 of which have been satisfied, however, TSB are still putting negative info on my credit file. I’ve been to speak to them in branch and over the phone more times than I can now count to resolve the issue. However, they are saying they wont change anything until I provide them with a discharge letter from the DRO. I feel really upset and depressed as I feel what was my last resort is taking over my entire life. I have worked hard since I was 15 and this is the only debt I’ve ever incurred and when I did the DRO things were never explained it could get this messy. The insolvency line is not taking telephone calls and because the DRO is very almost 6 years old it cannot be traced on the register as it only shows there for 3 months after it’s up. I’m begging for some advice. When 6 years is up and this drops off my file will these negative things also go or will it show they weren’t satisfied still? I’m seriously losing the will to see any positive results and it’s getting me down hearted.
Sara (Debt Camel) says
Does this TSB debt have a default on your credit record? Is that date on or before the date pf your DRO?
Katrina says
It is a loan and also a current account. The loan account just shows not satisfied although in branch they say their system shows it was written off. The current account was an overdraft of 289 which also went into the DRO but shows as a default after the DRO date.
Sara (Debt Camel) says
What was the date of your DRO?
What is the default date on the loan?
what is the default date on the overdraft?
Katrina says
The DRO date is 20th July 2015 (discharged 20th july 2016)
The loan defaulted in May 2015 (showing as not satisfied but on the bank system as written off)
The overdraft defaulted September 2015 (shows it to be satisfied but is after the DRO date and the bank system is showing it as a closed account but as a default)
Sara (Debt Camel) says
So the DRO itself will drop off your credit record in July.
You say “the loan defaulted in May 2015” if that means there is a default date on your credit record May 2015, then that debt will drop off in May before the DRO goes.
And the overdraft will drop off in September if it has a default date on your credit record in September 2015, so 2 months after the DRO goes.
Katrina says
So would my next step be to just leave it and wait for it all to drop off now or can I argue the fact the DRO was in july and the default date us after that?
Sara (Debt Camel) says
They don’t seem to be disputing that you had a DRO and their debts were in it?
In that case the default date for the overdraft should have been the date of your DRO.
Whether your DRO has completed or not isn’t relevant to this.
So you could send them a formal complaint asking them to change the default date on the overdraft. If they say no, you can send this to the Finacial Ombudsman.
Whether you think this is worth the hassle given the overdraft will disappear in September is up to you. It’s frustrating – they are in the wrong but it is your time and energy to try to get this corrected.
Michael says
Hello Sara,
Can you clarify this, can lenders actually see who your previous loan providers were? For example, I had a £5k loan with Barclays that was paid of last year. Will a credit check show just a £5k loan or would they see it was with Barclays aswel? The reason I ask is that I have a few “payday loans” however these were instalment loans and not your typical “payday loan” . These loans have been registered as unsecured loans on my credit report not “payday loan” or “advance against income”.
Thanks
Thanks
Sara (Debt Camel) says
Lenders can’t see you your current or previous credit was from.
Michael says
Thanks for your reply. That is good. So because these have been registered as unsecured instalment loans then I shouldn’t have a problem getting approved for a mortgage. No other negative information on my credit file.
Sara (Debt Camel) says
I don’t know what credit report you are looking at. I always suggest people looking for a mortgage get a report on each of the three credit refetrence agencies. And the Statutory reports are best. See https://debtcamel.co.uk/best-way-to-check-credit-score/
Martin says
Hi,
I understand that if I open a credit card I immediately lose 40 points of my credit score in Experian (i.e. the bad things happen immediately). Could you please advise how long it takes I gain that +90 score points if I use under 30% of my limit?
Thanks
Martin
Sara (Debt Camel) says
A few months normally but it depends what else is happening. If you get two bad credit cards at the same time, it takes longer to recover from the hit.
But really don’t get hung up on your credit score. Lenders do not use this number when they make a lending decision. 50 points more or less means very little.
Martin says
Hi Sara,
I have a second question about credit cards:
I am going to apply for a Mortgage in 4 months. I am also going to apply for a Credit card now!
I am aware that getting a credit card has some immediate negative points and some positive points in the long term. Currently, I have no credit card but I had a successful record of reporting my rents, utilities, loan, etc., without any late payment or negative records.
Considering my intended time to apply for a mortgage (in 4 months) would you suggest I apply for a pre-approved credit card? Would it be helpful in getting a better mortgage? I dod not need to use my credit balance too much. I just want to show my ability to manage it. But I am concerned about its short term score loss in my Experian profile.
Regards,
Martin
Sara (Debt Camel) says
I wouldn’t, it’s too close.
If there are no negatives on your credit record and it isn’t completely empty, then if you have an OK deposit and pass the affordabilty tests you should be OK. Make sure you go through a broker, not direct to a lender.
So far as I know the mortgage lenders pay no attention to rent reporting.
Martin says
Thank you Sara. Very helpful.
My credit record is not empty. I have 5 credit accounts all of them more than 6 months old. one is close to settlement and its closure. One is more than one year. I am just not eligible for the Electoral roll and don’t have a credit card. I have only been a resident for 13 months with a permanent job offer and a valid visa for 5 years. Would it be sufficient to get a mortgsge? Some people say you need to be heard at least for 2-3 years to be eligible to get a mortgage. I am not sure if they are right.
Sara (Debt Camel) says
Visa questions may be separate to credit record questions. Sorry you need to talk to a mortgage broker about this. As always a large deposit may help.
Martin says
Thank you, Sara.
Actually, the visa was not my main question. I just wanted to say I have one of the best visa options. My concern was 1-year residency. Is there any role that prevents getting a mortgage for people in the UK for just above a year?
Thansk.
Sara (Debt Camel) says
It is up to each lender to decide who they want to lend money to. You must apply through a broker who will know who is most likely to accept you, do not apply direct to a lender.
Charlie says
Hello
I just wanted to come and give an update after receiving some advice from Sara. i really appreciate your help. i had a really low credit score due to missed payments in the past and a CCJ. i have really made sure to utilise my credit cards to less that 50% and i now have a credit score of good. i went from very poor to good in 12 months. my CCJ is now 4 years old and i have no missed payments in the last 6 years. the best thing for my credit has defo been credit utilisation. so thank you for your advice and help
Amanda says
hi sara, at the min i have 2 defaults. when i rechecked as bamboo may be removing theirs, I noticed the other was to the debt collector that bamboo sold me to.. can I appeal that aswel if bamboo is removing theirs due to the unaffordiabilty complaint?
Sara (Debt Camel) says
yes you can
Emma K says
Hello All.
Can you help me please, all this info is frying my head!
I am looking to potentially buy my first home next year but I have 2 defaults on my account. one for £28 from Virgin, (2019 – which i didnt even know about) and another that was £66 from a debt company but i have now paid that off. I also have a CCJ but that is due to come off my account in july this year. My current clearscore score is 319, i dont understand why its so low with just the information i have provided. Will it go up considerably after my CCJ goes off my record? and do you think that is good enough score for a mortgage? Any advice is greatly received thanks
Weatherman says
Hi Emma
The first thing to remember is that lenders don’t look at your *score*, but at the information underneath it. The score’s a decent rule-of-thumb, but that’s all!
You might be able to challenge the Virgin default if you think it should never have been put on there. You should complain to them in writing, and to the Ombudsman if they don’t agree (there are two ombudsmen in telecoms – Virgin can tell you which they’re signed up to).
Your score should improve once your CCJ goes off your record. But make sure everything else is in as good a place as it can be too (e.g. on the electoral roll).
The defaults could cause difficulties when you apply for a mortgage, especially if they’re in the last few years – although they might not, it’s hard to say exactly and depends on the lender. If you find you’re getting rejected a lot, you could try a ‘bad credit’ broker. But it might well not come to that!
Paul says
I’m getting a default removed from my report this month due to an unaffordable loan.. Does this mean in theory that my score will go up by 350 if that was the hit from the original default?
Sara (Debt Camel) says
Only if the rest of your credit record is “clean”. Say you have 6 other defaults – your score may change very little as from a lender’s point of view the chance of you defaulting on a furure loan hasn’t really changed from when you had 7 defaults.
Amanda McCullough says
good question paul, sara i only had 1 default that will be removed in next 8 weeks. however i do have some late payments on a credit card which is over a year now, from feb 2020 its all being paid on time and nearly paid off and some accounts i had arrangements on 2019 which are paid off and closed. will the default being removed go up 350?
Sara (Debt Camel) says
what is your current score and what report are you looking at?
Amanda McCullough says
clearscore 257, i have changed name and address so realised my other account wasnt correct so set up a new one last week.. tho i only got re registered on electrol role last week aswel. so next report should show default off and electrol role added
Sara (Debt Camel) says
The numbers in the article above relate to Experian scores which are out of 999. Clearscore reports Equifax score, which are out of 700 so all the numbers in the above article would be likely to be a smaller effect on Equifax scores.
Could you come back and say what you new score is?
Amanda McCullough says
yes course will let you know. thanks
Daniel says
Hi
My credit score is Poor having had defaults on my file – the last of which drops off in a month’s time after 6 years.
I’m not expecting my credit rating to shoot up to Good/excellent though given I now don’t have much available credit. I have fairly recently got a card with Aqua of £1,900 on an Aqua card however Credit Karma suggests this is low and a higher balance (with low utilisation) reflects well with lenders. One option could be to add myself as a secondary cardholder to my partner’s credit card (her idea) – she has a limit of almost £10k. She never spends on this and nor would I, so the idea being that this allows me to have a higher available credit on my credit file and thus a low utilisation.
Does it work like this? Would I get the credit file benefit of higher credit limits with low utilisation, and of course more months of a good payment history on that card? Or would none of this impact my own credit score, just my partner’s? I’ve recently increased my credit limit with Aqua (they offered me this without any negative impact to my credit file) so unfortunately increasing my Aqua limit in the near future isn’t possible given I’ve only just had an increase.
Thanks
Dan
Sara (Debt Camel) says
What is your balance on this card at the moment?
Daniel says
About £1,500
Sara (Debt Camel) says
So it isn’t the size of the credit limit that is the problem, it is the amount of that limit you are using.
If you can get it below £550 your score should improve.
You would have to get your Aqua credit limit up to £5000 for your £1500 to be 30% of your creit limit – that isn’t going to happen.
Getting put on your partner’s credit card will have NO effect on your credit score. It won’t show on your credit record at all. It will be ignored in credit score calculations.
So what will help:
– stopping spending on the card completely. Can you do this? If not, then you have much bigger problems than your credi score as you are getting deeper into debt every month.
– making a fixed payment to Aqua that is larger than the minimum payment. Say the minimum is £103 – round it up to £110 and set up a standing order to pay that. That stops your minimum dropping by a tiny amount each month and so you will pay down the debt years faster.
– if your partner has a good enough credit score to get a 0% balance transfer to pay off your balance. Then you can repay her, saving a lot as there will be no interest added.
Daniel says
OK thanks Sara
I’m actually in an ok position to get it paid off quickly so that won’t be an issue. Does historical credit utilisation impact? i.e. If I get the balance down to <£550 soon do I get as much back on my score as if Id always kept the balance at c.£500? Or do I need to keep it there for x months in order to get further improvements to my credit score?
Sara (Debt Camel) says
Historic utilisation doesn’t matter.
It sounds as though you are in a good and improving position. our aim then has to be to get it down to zero, use the card once a month for something small (eg a tak of petrol) and then set the card to be repaid in full each month automatically. As the article above explains, that will give your score the biggest boost.
Matt says
Hi Sara
I was just wondering I am hoping to get a mortgage in six months time , so I decided to check my credit file . I have got a free trial with check my file and there are few payday loans showing on different reports. A few are with lenders that are in administration and few are still around. For example Myjar is showing as open on Experian and trans union . But have spoken to them this morning and told me that they are deleting credit files from every customer. But I must contact the credit agency so do I put a dispute in with both of the companies or with just one credit agency and hope they tell the others ?
Thanks
Sara (Debt Camel) says
you have to contact all the CRAs, they don’t talk to each other.
But if Myjar are deleing the debts I am not sure why you need to do anything?
PS dont forget to cancel that expensive check my file sub! You can do it all for free, see https://debtcamel.co.uk/best-way-to-check-credit-score/
Matt says
Thanks yeah I will do .
Richard says
Hi Sara, I have recently questioned my electoral role on Experian and seems to now show. However I have not seen an increase in my score even though nothing else has changed ? Any advice would be great.
Sara (Debt Camel) says
what report are you looking at?
Silviu says
Hi, i have 6 defaults all have been settled satisfied, 4 of them since 2018 and 2 late 2020. Paid all in February. Have no credit cards or loands. Have an cashplus (credit score boost) Can’t get even a mobile contract. After how long u think i will be able to get a credit card or phone contract?
Sara (Debt Camel) says
Can you save at least £20 a month?
Silviu says
Yes, even more
Have savings now, just want to to repair my credit file
Sara (Debt Camel) says
OK then look at LOQBOX https://www.loqbox.com/en_gb
That is an annual saving scheme that is set up so it looks like your monthly savings are repaying a loan. At the end of the year you get all your savings back (no interest) into a new easy access account you open (that’s how LOQBOX gets paid) but you can then take the money out and close the account down straightaway.
At the end of this year your credit record will show that you have perfectly repaid the loan. And all your defaults will be older and will have been settled for longer.