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.
Do overdrafts count in this calculation?
No, Experian doesn’t include overdrafts. But the amount you are using of your overdraft is counted as part of your total unsecured credit.
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.
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 many CCJs, there will already be a debt with a default on your record, in this case a CCJ then increases the harm to your credit record, but not by as much as 250 points.)
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 installments. This can increase your score by 20 points. But do check what your insurer charges. Many people are paying over 20% interest to pay monthly, with a few firms charging over 50% so this can be incredibly expensive!
There is also Experian’s Boost facility. That can add up to 66 points to your Experian Credit Score – but it isn’t clear how many lenders will actually use this new Boost data.
Four 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.
- From summer 2022, BNPL data such as Klarna purchases will start to be shown on some credit reports. However these will be ignored when calculating your credit score. Even when you miss a payment and a lender such as Klarna adds a late fee, this will still not affect your credit score – but as the missed payments will show on your credit record other lenders may decide not to give you credit.
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 1000 (it used to be 700 – it was changed in 2021.)
- TransUnion’s maximum score is 710.
So a change to your score for any particular factor is going to be smaller on TransUnion than Experian. And a 500 score on Equifax is poor but it’s good if you are looking at a Clearscore report!
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?
jon says
hi i a few defaults and all had gone of my credit rebort but still have one left well be 6 years old in next month as I am checking it on noodle and total money free credit report will my credit score start increase after that day ?
and also during the last 6 years I have got row credit card the last one is less than one month old .and all my defaults was less 2500£
many thanks
Sara (Debt Camel) says
If that is your last default, your credit score should jump. You may not see this the day after, as the reports you mention are only updated every 30 days, so your records may have been changed but you won’t see this until you next new report.
“I have got row credit card ” did that mean to say two credit cards?
A new credit card will harm your credit score for a few months. make sure you repay the balance on time and in full to get the maximum benefit from this.
jon says
yes tow credit cards.
the last default is an 270 £ over draft will that makes any difference?
Mandy says
Hi Sarah,
In this article, you have not included the impact of hard credit searches on credit scores. Does the credit score reduce with each search? What happens when the search is 6 months old; is it true that it is no longer counted? Are you able to do write something similar to what you have written above for credit utilisation and defaults, showing the number of points lost and what happens as time progresses?
Thanks.
Sara (Debt Camel) says
I don’t know the exact numbers. Hard searches don’t affect your score after 6 months, but I think they stay on your credit record for a year. Some lenders may care more about them than others.
jamie barden says
Hello. Not sure if I’m posting this in the correct place but here goes!
I have one creditcard with a 12k limit and its current running at 98% use. If i was to clear the card am i right in thinking i’ll potentially gain 90points for going under 30% and an additional 60points for clearing the card. Your site says using over 90% will lose you 50points. Would i also gain those lost points back? Bringing the total to 200points? Looking forwar to your reply. Great website. Its really educated us.
Sara (Debt Camel) says
Do you have other credit cards as well?
SG says
HI THERE, I WOULD LOVE TO KNOW THE ANSWER IF WE DONT HAVE ANY OTHER CREDIT CARDS. ALSO HOW QUICKLY WILL IT JUMP UP?
LOVI KANG says
Hi sara
I moved to my current address in july 18 and today a letter came from credit reference agency saying electricity bill not paid for this address from jan-till may18 .. and on letter says if not paid then may affect ur credit ability..
so will this have any affect on my credit file as i live on this address now but from july onwards please
Sara (Debt Camel) says
I assume this letter was not addressed to you by name. If it wasn’t, it can’t ever affect your credit record, there is no black listing of addresses these days.
LOVI KANG says
Hi sara , i am thinking to apply thru natwest and want to make sure one thing on employment status .. on their website it says 6 months continous employment ..
So my wife started her job on 1-june-2018 , can we apply on 1-nov-2018 or jot please but she will be out of her probabtion pwriod by that time ..
Or does it has to be after 6 months i.e on 1 dec
Thanks
Sara (Debt Camel) says
Apply for what?
LOVI KANG says
O sorry ,,
Apply for mortgage .. i am main applicant with last 3 years income
But my wife only started her job on 1 june and they saying it has to be six months continous employment .,; so just wondering if we culd apply on or after 1 nov ..
Sara (Debt Camel) says
Wait the extra month. You need to comply with the letter of the conditions for mortgages.
BUT I would never recommend anyone applies for a mortgage directly to a lender. Talk to a good broker such as London & Country or Habito.
LOVI KANG says
Thanks sara ,, no it was not addressed to me
On the top it says the legal owner
JayA says
I’m toying with the idea of leasing a car for 2 years with 3 months up front payments. Do you know whether leasing has the same impact on your credit score as a loan?
Sara (Debt Camel) says
I would assume so. Leasing is an expensive option usually as you are paying for the early, high depreciation on the car.
Marcia H says
Hi Sara,
I have a Paypal credit account that will be 6 months old in October. I’ve worked hard to get it mostly paid off, it will be before the 6 month mark. Once it’s paid, can I have it removed from my credit report? If so, what is the process and if not, would closing it be better for my credit rating than having it open and unused?
Sara (Debt Camel) says
It will remain for 6 years from the date it is closed (assuming you didn’t default on it). You can’t get it removed any faster.
Closing it is marginally worse for your credit score BUT it may mean that some lenders are more likley to lend to you, as some don’t like you to have too much unused credit.
Marcia H says
Thanks so much for letting me know that Sara. I’ll continue to keep it within 10% usage after learning about credit utilisation from you! Seeing my credit score rise is motivating.
M
I Price says
Hi,
I had a CCJ registered against me that I did not know about until discovering it on my credit file. I have successfully had it set aside after paying the fees and defending it. It has also now been removed from all credit reference agency files – however, my credit score has not returned the percentile it took from my score upon the CCJ’s initial entry. I have called and written to equifax – who have said ‘The score will take a while to build back up and that they cannot overide the ‘automated calculation’ – but surely this cannot be the case can it? As this is technically now giving a score based on a CCJ that has been advised by law to be struck from all records and not held against me!
Sara (Debt Camel) says
How big a difference are you talking about? Has anything else changed on your credit record, eg have any additional problems been added or has your limit utilisation increased for credit cards? The debt the CCJ relates to -does that show on your credit record?
Ian Price says
The dip appears to be around 80+ points in the month CCJ was recorded on to my file. The record has now been removed, but no points have gone up. Nothing further changed as far as I can see.
Sara (Debt Camel) says
That is quite a small drop for a CCJ – was your credit record already poor? Do you have other CCJs? If there were already a lot of problems, it can be hard to disentangle the effect of changing any one part.
Ian says
I don’t really have credit, so yes – poor. Went from 360ish to 250ish. But as I say, I would expect to see whatever the percentage dropped – go back up, regardless of any other goings on (except if the relative up was compounded by other factors that month, which is not the case).
Emma says
I have just run an Experian credit file report and found large credit card balance I settled 18 months ago, still on my file as an outstanding balance. I have asked my bank to correct this and backdate it to the date it was settled. How much of an impact will this have on score?
Sara (Debt Camel) says
Reducing your balance outstanding improves your record by reducing your utilisation. If you haven’t been making any payments in the last 18 months, have you got late payments markers on your credit record? Getting rid of these will produce a large improvement!
Do check your Equifax and Callcredit records as well as Experian.
Andrew Lammas says
Hi
I have had a default on my file and it has in last few days just gone over 6 years do I have to apply to my credit file for it to be taken or does it drop off automatically – I have just ordered a new report and its still on there
Sara (Debt Camel) says
Assuming your new report shows a default date on the debt which is over 6 years old, it will have dropped off. the reason you can still see it is because you are using a credit report that only takes snapshots of your credit record, not real time. So you are looking at the state of your credit record a few days or weeks ago. This will get corrected!
Simon says
Hi Sara,
Over the years I have managed to accrue a fairly substantial number of credit cards (9) with a total credit limit of £55,000
At the moment 7 cards have zero balances, 1 card has approx £3,000 at 0% being paid off monthly, and the final card is used for grocery spending etc and is paid off each month.
I’m looking to apply for a mortgage within the next few months and was wondering how much of an effect (negative) it would have on my file to close the bulk of my ‘unused’ credit card accounts.
There probably isn’t an answer for this but is there an ‘ideal’ amount of credit that someone should hold ie x% of annual income and a balance of less than 30% of that limit being used? Thanks for your time.
Sara (Debt Camel) says
The ideal amount of credit is zero. Not counting cards that you just use and pay off in full every month.
In your case I suggest you should be closing a lot of your unused cards. Mortgage lenders don’t like you to have huge amounts of unused credit. Aim to get credit limit down to 12k or so. So you are using less than 30% of your total availanle limit. Keep the cards which have the best interest rate in case you do need to borrow on them. And if they are about the same interest, keep the older accounts.
And overpay the 0% card each month if you aren’t already doing so.
Simon says
Thanks for the reply Sara, much appreciated.
I’m currently overpaying on the 0% card to get it to zero as quickly as possible.
Would you recommend reducing the credit limit on the ‘grocery’ card – it has a limit of 10k or so and we spend between 600-800 per month on it and pay the balance in full each month. I’m basically trying to minimise the negative effect (if any) that closing accounts and reducing my credit limit will have on my credit file with me looking to apply for a mortgage in the next 3 months or so.
Sara (Debt Camel) says
My guess. Is. Your credit score is great? If it isn’t, what problems are there?
Simon says
The current scores are 520 with Clearscore and 983 with Experian via MSE credit club.
There’s no CCJ’s, always paid each month so no late payments, etc.
Sara (Debt Camel) says
520 isn’t bad but it’s not a great Equifax score, have you looked at that report to see why it isn’t higher?
When you are getting a mortgage, your credit score doesn’t actually matter, what matters is any previous problems with credit which a mortgage lender may also see as problems. So look at the Clearscore report in detail and make sure there aren’t any problems in there. Also check Noddle to see what your CallCredit record is like.
Mortgage lenders will NOT like huge amounts of unused credit. 55k if your balance in3k is ridiculous. What if you bought the house and decided to furnish it and put a new kitchen in on your credit card? I am serious that you need to close some unused card accounts to get this down and any temporary hit to your credit score should be unimportant if the rest of your credit record is great.
Simon says
I’ve had a high utilization rate recently and have now paid this all off, although the current credit report is still showing c 26k of balances, which will reduce down to 3k when the next report comes out – I’m assuming this high level of (now paid off) debt is part of the score issue.
Many thanks for all of your help and time, I’ll close the unused accounts and check my other reports as you suggest. Thank you ever so much.
S.J says
I had a debt relief order in 2015 which I believe does not come off my credit report for 6 years. Included within this debt relief order was a debt that is still showing as outstanding on my report. I have since liaised with issuing party and they have advised that they have updated their files and have marked this as no longer outstanding. Will this show on my next credit report and will this increase my existing score ?
Sara (Debt Camel) says
It can take a few weeks for a correction by a lender to show through to your credit report.
this is very unlikely to improve your credit score. With the DRO still showing and the debt itself showing with a default, the fact the balance is down to zero will not affect the headline credit score. BUT it may make some lenders more prepared to lend to you.
Bonnie says
Hi Sarah.
I was wondering if it’s possible somehow to get a default removed from your credit rating? If I offered to pay the full sum in one amount, what would the chances of them agreeing to remove it… slim probably but will it be worth a try? I’m 22 and i do not want debt hanging over my head til I’m 28. It’s devastating because I have always been responsible with credit and money.
It was my account the debt is to … but my mum was the one using it. It’s a complicated situation and I can’t exactly report my own mum for fraud… we also live at the same address so yeah…. any advice? Would the company have to report it as fraud if I tried explaining it, or would they simply not believe me and ask for proof?
Thanks
Sara (Debt Camel) says
If you just pay it, there is no way they will agree to remove the default.
The only way this could happen would be if you reported it as fraud and told the lender the crime reference number. Even then it may be complicated as you are at the same address.
If you pay it in full now, your credit score won’t improve, but after a while as the default gets older, there will be more lenders that are prepared to lend to you.
I’m sorry, no good choices for you.
kate says
Hi there, how much many points will be added to my credit score once i pay off a default?
Sara (Debt Camel) says
This article looks at your situation@ https://debtcamel.co.uk/defaulted-account-credit-score/
Sarah says
My husband had five defaults registered in 2012/2013, all settled, and two we eventually got removed as it was deemed as irresponsible lending by ombudsman- none of the three remaining defaults (all under £500) however are showing on my husbands credit report and it’s showing as good however Santander have rejected our mortgage decision in principle because of adverse credit. Any ideas what’s going on?
Sara (Debt Camel) says
Have you checked your credit reports from all three credit reference agencies? See https://debtcamel.co.uk/best-way-to-check-credit-score/
Sarah says
No we haven’t – my mistake, it was 2014/15 they were registered. I will get him to check – I was hoping to be able to get a mortgage now everything was over 3 years old and now that we’ve got a 15% deposit to put down. :(
Sara (Debt Camel) says
You may well be able to get a mortgage if all the debts have been settled for a while – but do check all three CRAs. If there are problems showing but they have been settled, you need to talk to a mortgage broker, not go direct to a lender.
diana says
Hi
Sorry to jump onto your post. Just wondering if you got the mortgage at the end. Thank you
Nat says
Hi Sara,
I am hoping to apply for a mortgage early next year as a first time buyer, I’d like to think of myself as generally money savvy but I had a shock when I checked my credit reports. Hoping you can pick out where I’ve gone wrong/how I can improve over the next 6-12months!
I have three credit cards; two of which have zero balances – anxious about closing £0 balances in case utilisation is negatively impacted. All three cards are destroyed and unused.
Card 1: £0 balance, £3000 limit, over 5 years old
Card 2: £0 balance, £900 limit, 18months old
Card 3: £2,000 balance, £2,500 limit. Opened June this year: 0% balance & money transfer to ‘consolidate’’ – I pay above the minimum payment each month.
I also have a car on finance with a £2,000 balance and a small £100 utility default from early 2016 (mix up with the final gas bill when I moved out).
I have no missed payments, no other loans & no other adverse credit, yet my credit rating seems extremely bad (very poor on all three credit sites) – could I be missing something or does this sound correct for one old(ish) utility default, a low balance car loan and my credit cards/credit utilisation? And if correct, is there anything I can do to improve this to support my mortgage next year?
Thanks,
Nat
Sara (Debt Camel) says
The biggest problem from the ones you have mentioned is the default. Have you repaid this debt? That won’t increase your credit score but will make it easier to get a mortgage – some high street lenders have a policy that they are happy with defaults over 3 years old that have been settled for more than a year. When you apply for a mortgage go through a broker, not direct to a bank.
The other problem is your high utilisation rate on the consolidation card. It’s not over 90%, but if you could get it down to under 30% that would give a boost to your credit score. It’s a good idea to limit discretionary spending anyway in the run up to getting a mortgage as your bank statements will be looked at, so plan a frugal few months (including Christmas) and throw the cash saved at that credit card.
Also having opened an account in the last 6 months is always negative, but that will pass – do not make any more credit applications!
Teng says
Hi, I am applying a first mortgage. By checking Experian it is 699 with a CCJ settled one year ago linked to one of old address. I never know this debit because moved from this address 4years ago Called to court they said it seems like parking company debit £370.
No credit card
No loans
My question is: Is it will be ok to apply a mortgage if I paid off the debit.
Another question is: Is any possible to increase my credit score in my case.
Thank you
Sara (Debt Camel) says
It is a shame you paid the CCJ and didn’t apply for a set aside to get it off your credit record, but nothing can be done about that now.
There is no way to increase your credit score significantly until the CCJ goes – but it isn’t your headline credit score that matters for a mortgage, it’s what the lender thinks about your situation. I suggest you talk to a good mortgage broker and see what they say
Kim says
Hi – this was a really useful article, thank you. In addition to this how do pay day loan applications affect your score do? Kind regards Kim
Sara (Debt Camel) says
They don’t affect your headline credit score at all – assuming they are all paid on time of course.
But they are flagged up as payday loan on the copy of your credit record that other lenders can see, and some lenders will regard them as an indication of financial problems and refuse to lend to you. Most mortgage lenders will not consider people who have had payday loans in the last year.
Village Idiot says
Hi,
I have a 4 year old default, and a 5 3/4 year old default that is about to drop off of course.
I also have high card utilisation and arrears on a number of accounts. The arrears are being dealt with, and am successfully avoiding any new defaults, but because these are the priority there’s nothing much going to happen soon about the card utlisation.
I’m wondering what the impact of arrears and arrangements to pay are, compared to defaults, and what is the best path to improving my score, assuming I can only act sensibly from now and slowly repair those arrears. The arrears picture will be better from February but a couple are going to take longer because they involve bigger numbers (e.g. mortgage).
It is realistic to have no arrears in a year’s time, so when the newest default drops off in two years, I’m wondering what my credit score would look like with no defaults, probably still high card utilisation and no arrears in 12 months – but lots before then?
Thanks
Sara (Debt Camel) says
Sorry that is impossible to guess. Mortgage arrears are a priority debt and you need those on an agreed repayment, even if it means getting your other debts down more slowly.
I can’t tell if avoiding new defaults is sensible. Sometimes it’s just best to bite the bullet and accept your current situation in unsustainable and go for a DMP with defaults for all your non priority debts.
But if things are getting better overall and nothing is getting worse, then time is the great healer of credit record problems and. in a few years, things will look much better. I just can’t tell if that will be next year or not.
Nat Garvey says
Hi Sara, I have a question… Savvy have been reporting “6 month late” payment markers (every month) on my credit file for over 1 year now. I wanted to know if “6 month late” markers are more detrimental than “arrangement to pay” markers?
Appreciate your feedback
Thanks
Sara (Debt Camel) says
It’s up to each lender how they view them, but in practice they are much the same.
MJ says
Hi, my wife and I are currently looking into moving up the property ladder around summer time.
My current credit scores are – Equifax 384, Experian 824 and Noddle – 557.
My wife’s scores are – Equifax – 390, Experian 784, Noddle 524.
I have a default on my account which will come off in April and my wife has one default which will come off in July.
At the moment we have “fair” credit scores with 2/3 credit agencies, can you tell me if the defaults being removed will bring us into the good category or if they’re no longer worth many points at all?
We have a few late payments on our reports from 2015, which we can’t do anything about.
My wife has a store card which will be cleared within a few months and I have a credit card which we owe £550 on out of the £3,700 limit.
Im looking for as much advice on our credit score building as possible to secure our mortgage.
We’re now in a position to build our bank accounts up so all spare money will be clearing the store card and then the rest will be kept in the bank to support the “affordability test” which is needed with the application.
Sara (Debt Camel) says
The defaults that will come off your and your wife’s account will increase the credit scores – but are the debts repaid?
Also read https://debtcamel.co.uk/improve-credit-score-mortgage/ which looks more at credit scores and mortgages.
MJ says
Yes, also debts were paid as soon as we realised we had defaulted.
Sara (Debt Camel) says
So you want to clear the store card and be making more than the minimum payments to the credit card every month.
Avoid any new credit applications at all if you will be applying for a mortgage in August when the last default goes and both of your credit scores should be up to good. A few late payments in 2015 are unlikely to be a problem.
From August your past credit is unlikely to be a problem so it’s all down to the affordability and your deposit.
Matt says
Hi Sara
I just received a sar from Barclays and there is no mention of them saying that hoist who bought the loan can carry on recording the information on my credit file can I ask hoist to remove all the data on the debt that I bought as there was no agreement with my self that I agreed to that . I don’t know if I have a chance but just wanted to run it by you .
Thanks
Sara (Debt Camel) says
No chance.
Al bun says
I have a debt (now cleared) that sat at missed payment, 5 months for about 3 years!
The original debt first missed payment in June 2015. It should have been defaulted by December 2015, but this never happened – it simply just continued to show as missed payments.
I cleared this debt in April 2018. The account is now closed, but this means I will have a 5 month late payment on my credit record until April 2024. Should I instead request that a retrospective default is added from December 2015?
Sara (Debt Camel) says
yes, you should ask – see https://debtcamel.co.uk/debt-default-date/. Who is the creditor?
Shay says
Hello, love this website thank you :) I have a few questions.. sorry for the essay
1) I signed up to the website “checkmyfile” and discovered a few things. I discovered my credit score across all of the 3 main companies is very very low at 368. I have a CCJ of 7k for an old car on finance that i stopped paying for over 10 years ago appear on my file 3 years ago that has 3 years left until it expires and removes itself from my report. Also under registered addresses it shows my new address that I’ve lived In for the last 5 years and also my old address still registered. I’ve been told other residents who are registered under a registered address can affect your score? How do i remove my old address from my file as I don’t want the present residents affecting my score.
Sara (Debt Camel) says
-I signed up to the website “checkmyfile” – I suggest you cancel it and save yourself £180 a year! You can get all the information you need for free, see https://debtcamel.co.uk/best-way-to-check-credit-score/
– I have a CCJ of 7k for an old car on finance that I stopped paying for over 10 years ago appear on my file 3 years ago that has 3 years left until it expires and removes itself from my report – That would explain your low score. If you get traced you may get bailiffs round. You may want to think about an arrangement to pay this.
– I’ve been told other residents who are registered under a registered address can affect your score? – No they don’t.
– How do I remove my old address from my file – You can’t.
T catterall says
I have a default on my credit file 24\10\13. When does this fall off ?
Sara (Debt Camel) says
24/10/19 – has the debt been repaid?
T catterall says
No !! I’ve heard nothing from lowell,ss since 2014 but i was considering contacting them to pay it as i may get a ccj against me .losing my then job in 2013 has destroyed my credit report no end !!
Puzzled says
Interested in yr thoughts on my situation. My credit score isn’t following these rules. I cleared a default two months ago and no change. And four days ago another default should have gone but still there on ClearScore. Should I complain to ClearScore or the creditors?
Sara (Debt Camel) says
Those sound like two different issues.
Even if you pay a default, your credit score doesn’t change. See https://debtcamel.co.uk/defaulted-account-credit-score/. I think it’s nuts, but that is how the system is supposed to work.
If there was a default date of 23 Jan 2013 on a debt on your ClearScore record it will have dropped off by now. The problem almost certainly is that your ClearScore report is not a realtime snapshot, it is only updated once a month, so you will be seeing an old report.
Richie says
Hi Sara, you say a CCJ has a negative value of around 250 points. Is it possible to predict the points value of an IVA too? What I’m really asking is that when a completed IVA is removed from credit files, and no other financial information changes, what kind of increase could you expect to see in your credit score (if any)? Thanks.
Sara (Debt Camel) says
This is so individual. It isn’t normally the IVA itself that has destroyed your credit score, it is all the associated defaults that went with it. And the fact that for most people their account stopped having any credit accounts in good order. So when your IVA drops off, have all the other defaults gone before or are a lot of them going at the same time? And what positive marks have you had added in the last year or two?
Richie says
I’m in year 7 of my IVA so my file looks good apart from the IVA marker itself. My Noddle score is 565. Utilities and Vanquis card all green. I’m just wondering if I’ll see a big jump in my score when I finally complete the IVA? Thanks again.
Sara (Debt Camel) says
ok so your Noddle Score is out of 710. At a guess yours will probably jump a hundred? I would be very interested if you could come back and say what does happen!
Richie says
That would be good 😊 I will get my other credit scores too, and let you know how they change. Won’t be for a few months yet though – but nearly there…
Sara (Debt Camel) says
countdown… well done for surviving a 7 year IVA!
Richie says
Hi Sarah, just a little update. I’ve just made my final IVA payment today (and repayed £36k from a £30k debt…!!) so now I wait to see what happens. All of my credit files show on-time payments for everything for the last 6 years. I have the Vanquis card which is repaid fully each month, with a limit of £2k. The only negative showing is the IVA itself (from 2012).
My credit scores today are:
Karma = 573
Clearscore = 345
Experian = 876
I’ll come back and post the credit score changes here in a few months once my IVA is removed. Thanks again for a very helpful website 👍
Gary cripps says
My credit score with Totally Money for December is 566 with Clear Score it is 366 take no notice its all a farce
Sara (Debt Camel) says
Sometimes credit scores look like they have come out of a random number generator, don’t they…
But the explanation for your two very different credit scores is that they are reporting on two different credit reference agencies (CRA):
– Totally Money reports on CallCredit’s information
– ClearScore reports on Equifax’s information.
Lenders can choose which CRA to report to. If you look at the details of your Totally Money report you will probably see some debts listed with defaults or late payments which don’t show on your ClearScore report. So the credit rating is lower.
–
Gary says
Sounds to me then that equifax needs to get there facts right before they pass it on to clear score or third party’s also totally money up date there credit scores daily because they are live scores
Sara (Debt Camel) says
There may be debts which are reported on Equifax and not TransUnion (the new name for Callcredit) and vice versa. Neither is right or wrong, they are just different.
Totally Money updates the credit scores monthly. Same as ClearScore.
If you want a more frequently updated report on TransUnion, Use Credit Karmsa which updates weekly.
Teresa Quinsey says
Hello, can you explain why financial difficulties have to show on a credit report for 6 years?
Tess
Sara (Debt Camel) says
The factual answer is because that is the agreement between the Credit Industry (through the Steering Committee on Reciprocity – SCOR) and the Information Commissioners Office (ICO). See http://www.scoronline.co.uk/key-documents.
If you are wondering why 6, not 3 or 5 or 8… I think the generally accepted answer is that few lenders – who use credit records to assess future lending – are concerned about problems that are more than 6 years in the past. An individual lender can, of course, decide that they don’t care about problems that are more then 2 or 3 years if they want.
My personal view is that 6 years is fine, however your credit score should reflect if you have resolved problems eg by paying off a default. At the moment it doesn’t and I feel that is not just unfair but not really helpful.
James T says
I’ve finally had my CCJ fall off my credit report! After 7 years it is no longer visable.
However, my credit score hasnt changed? This is very worrying? Surely it will change? When will this happen? I’ve been waiting on this so I can look at a mortgage?
Sara (Debt Camel) says
What is your credit score? What other problems are showing on your credit record – defaults? missed payments?
Dan says
Hi Sarah,
I have a card with Vanquis. My utilisation is basically 0 with an available balance of £1300. I was tempted to cancel the card as I do not use it and do not have other cards. However I am worried getting rid of it will affect my score? Also, does having a high APR card like Vanquis reflect negatively on your score or at least on how lenders view you?
Sara (Debt Camel) says
This s your only credit card? What is your credit score like at the moment?
Dan says
Yes that is my only credit card, i have worked hard to basically pay off all my debt (apart from one loan in good standing) i have 2 defaults which are due to drop off in 2 weeks (thank god) my score just now on experian is around the 500ish (very poor/poor) buy I am hoping when the only two black marks fall off my score should have a considerable improvement? However, looking into the future I just wondered if having a card like Vanquis on my file (even if its in good standing) would be viewed negatively as it is a high apr card
marian says
hi, i am in a argument in the court for a contract of borrowing finished in 2013 in Romania with a person with Romanian nationality , he was romanian then and is still Romanian today. He came to the UK and made a claim about me here, i would like to know , in the situation he would win, would this be considered a CCJ?
Sara (Debt Camel) says
“in the court” is this an English court? If it is, when did you get the Claim Form and have you entered a defence?
Graham says
Hi I had 2 defaults on my credit report one which had a balance of 1,100 dated the 15th March 2013, the other dated April 2013 having a balance of zero as i paid it off 3 years ago in full it is marked as satisfied. Now the first one has dropped off, leaving just the fully settled one, however there was no increase to my credit score it actually went down by 7 points ???. Apparently due to the average age of my credit accounts .
There doesnt seem to be much sense to this credit scoring at all.
Graham
Sara (Debt Camel) says
You should notice a big change when the other default goes.
Rachell says
Hi
I have been using clear score and have a terrible score of 126. I have four ccjs on there i was wondering if i settle all these (£2500) would this change my score.
Sara (Debt Camel) says
Your headline credit score, on whatever report you use, will not change if you repay these CCJs.
But repaying they may mean some lender will be more prepared to offer you credit. And it means you avoid the possibility of bailiffs or an attachment of earnings.
Carla says
Hi Sara,
I have done some reading but can’t find a clear answer for this. I have 4 late payments for a phone bill (account closed) from 2012. Are these missed payments still being included in my credit score? Also, as an update, I asked you a question in relation to a last default (already settled) dropping off my report and I’m pleased to say my score went up 76 points in March after it fell off.
Thanks for your help.
charlotte benson says
Hi, Is there anyway of gaining points other than credit utilisation
if you settle a CCJ will you gain any points for that?
I have 1 default that is 5 years old and a CCJ and my credit is just not budging. I have recently paid off the CCJ and I am just waiting for it to be updated on my credit file
Sara (Debt Camel) says
No, paying off a CCJ will not help your credit score. BUT it may make some lenders more prepared to lend to you. And of course it stops any possibility of bailiffs, an attachment of earnings or a charging order.
Basically when you have bad things like CCJs, insolvency, defaults on your record, it is very hard for any positive marks to get you up to an OK credit score. Being on the electoral roll helps a tiny bit. Having a very low credit utilisation does.
charlotte benson says
Thank you
so just to be clear CCJ is now paid and it is the only thing on the credit file that is bad
but score will still not go up
but I can increase it with better credit utilisation
Sara (Debt Camel) says
You can increase it with lower credit utilisation as the article above says.
Matt says
Hi
I have 2 outstanding defaults left on my credit file which are due to come off soon. Will my score increase by 400 points or just the 200 points?
Many thanks in advance
Sara (Debt Camel) says
It depends on the rest of your credit record. But probably somewhere in between. A second default doesn’t have the same full impact as the first one has.
Could you come back and say? People love to hear “real” reports!
Matt says
Originally I had had 7 defaults on my credit file which have gradually fallen off over the last few months. A few of them I had to ask the lender numerous times to do this as they automatically didn’t come off. Sainsbury’s bank apologised and gave my £100 in gift vouchers!
My score generally hasn’t increased much with 5 defaults coming off and 2 remaining. There is 1 other debt which I’m trying to add a default as it’s still showing “ arrange to pay “
The only other issue could be the 3 credit cards I have with limits of around £500 which are maxed out, so the utilisation is poor.
Other than that I have no missed payments in 6 years.
I had many payday loans but never missed a payment and are closed with a zero balance.
My score has varied plus or minus 100 points over the last few years.
I hope once these 2 defaults disappear and I get a default added to the remaining one. I should finally find some kind of closure to the mess I was in.
It’s been very frustrating to be honest….
Sara (Debt Camel) says
5 defaults coming off won’t make much difference with 2 remaining, and an AP and maxed out credit cards.
You have a lot of payday loan complaints underway. Any refunds from them could be used to pay off your credit cards – 3 cards with low limits all maxed out is not good for your credit score. 3 cards with a zero balance which use and repay in full each month will start giving you some positive marks which you badly need.
Matt says
Many thanks for the advice
STR says
Hi Sarah
I have paid of 0ver 24k of my 40k debts from directors loans/ charges (business failure 4 years ago). I only have 1 of 5 debts left which is a bank loan of 16k. I am on a DMP and have paid diligently reducing the debt by £270 per month without any missed payments. My Credit rating is still low and amusingly went from 521 to 523 on paying off the the last lump of 16k 4 months ago lol The bank is playing hard ball and wont settle – wants full payment despite me offering 65%.
My question – should I just focus on clearing the loan/ closing the DMP or should I apply for a poor credit credit card to rebuild my credit despite the fact im still in default?
Sara (Debt Camel) says
why not do both – they aren’t mutually exclusive.
Tom says
Hi Sarah,
Have been in UK since march 2017, working Full Time.
I have been decline credit card twice now (2018) from Natwest, My Credit Score is 737 on Experian, I have no Debt, not borrowed before, also I am on Electoral Roll.
The Negative Influencer on my Credit Score state (1) I have no settled account (2) The age of my account is too low.
Please can you advice me on how to get a Credit Card and how to build my credit score.
Thank you
Sara (Debt Camel) says
If you can save £20 a month (or more) then have a look at LOQBOX https://debtcamel.co.uk/loqbox/. That feels like saving, you end up with a savings pot but on your credit record it looks like a loan you are repaying. At the end of the year you will have a whole year of debt repayments and a settled account on your credit record.
Louise says
Hi Sara
Hope you can help me , I lost my job at the start of 2015 , and I am trying to get a mortgage . I recently checked my credit file and saw 66666 going back to November 2015 . I have been through resolver and have been sent this . I have one other payday loan that defaulted in February 2016 .
Should I send this to ombudsman and ask them to add a default for early 2016. Or should I leave it as it and hope it drops of in 2022 .
Any help would be appreciate
Thanks
Louise Gotts
I have reviewed the history of your account and found that no payments have been received to the loan provided to you on 4 October 2015.
The current balance outstanding is £ mPlease contact us on to arrange repayment of the outstanding balance.
The credit file entry relating to the loan will then be updated to show that the loan has been settled. This will then be visible to any potential future lenders viewing your credit file.
Whilst the loan was not defaulted on your credit file, our system will ensure that the entry is removed 6 years after the first date it could have been marked as defaulted.
Sara (Debt Camel) says
This is a payday loan? Were you asking for a payday loan refund through resolver? Had you had any loans from that lender before the one that defaulted?
Same question for the payday loan with a default on it.
Louise says
Hi Sara
Yes this was for a pay day loan . I was asking for a default to be applied for December 2015 or March 2016 , as the rules of the ico . I had never borrowed from them before and was turned down by an adjudicated in 2017 as it was only one loan . I held over five payday loans at the time .
Thanks for getting back to me
Louise
Sara (Debt Camel) says
Then the lender should add a default within 6 months of you failing to pay. If they refuse, put in a complaint and take it to FOS.
Jackie says
Hi it’s been six yrs of bad credit history. I have sold house and repaid mortgage. Most of defaults have come off. I had a ccj which was paid within month. I asked for a settlement letter and never received it since.last yr. I have asked it again two days ago and they will post it. My question is after my.mortgage had been paid now over two yrs ago and ccj also most of the defaults have dropped off except one which funnily enough was supposed to in February but now the dates moved to July; how is that even possible? But, after all paid and dropped off my history is still v poor. Why is that please? Massive mortgage cleared and ccj cleared. Just waiting for settlement letter any day to send to court. I have a vanquis cc to pay monthly which I’m on top of and one default which I might settle for one thousand. The other dates just move forward to avoid being dropped off why is that?
1. Why has my score not proved
2. What can be done about it
3. When will I see an improvement as I want to buy a house and need a mortgage.
Sara (Debt Camel) says
“I had a ccj which was paid within month. I asked for a settlement letter and never received it since.last yr.” are you saying that the CCJ is still showing on your credit record? That will have a significant effect on your credit score. You need to send your bank statement showing when it was paid to the court, see https://debtcamel.co.uk/paid-ccj-satisfied/
“one which funnily enough was supposed to in February but now the dates moved to July” that sounds wrong. Send a complaint to the lender or the debt collector who has changed the default date to be later. Of course it will take a while to get this sorted – probably beyond July – but you don’t want this to happen again.
“I have a vanquis cc to pay monthly which I’m on top of” how much of your credit limit are you using? If this is over 30% it is harming your credit score.
Jackie says
Thank you for your answers. I am waiting for the settlement letter which was supposed to arrive on Saturday. I will send that off to the courts for my ccj to be removed. The cc I don’t think I’m using much but might pay it off asap within two months. Just the default which I don’t want to pay is linked to my separated husband. It was his but joint acct. It has definitely moved two months to avoid being dropped off so still showing on my history.
Just want to know with the ccj and defaults removed how much can my history improve ? Will I be able to get a mortgage on normal interest rate?
Thank you in advance.
Sara (Debt Camel) says
Well there is a problem that if you contact the lender who moved the default, they may then chase you for payment and go for a CCJ.
I can’t really guess how much your credit score is likely to improve (do any of the debts still showing have late payments for example) but if you only have 1 CCJ and 1 default, your score should go up a lot if they both drop off. You definitely boost your credit score by clearing the Vanquis account to zero, then using it for something small each month and repaying that on time.
Joe says
for those trying to work out the effect of a defualt on their score
My defualt just dropped of (after 6 long years)
It was £200 to water company that i foollishly owed due to cancelling DD when i moved properties
Isatisfied the debt as soon as i found out (1 year later)
My credit score was stuck between 672 and 773 dependant of what % of my credit card i was using
The default droppe off on 12th May, my score soured by 226 points to 999
So a 5 year and 11 month old default was costing me 226 points
I appreciate the score is only an indication and companies do not see/use the socre, i had been declined loans (probably due to default)
Sara (Debt Camel) says
Great to hear details of a real case.
Jackie says
Thanks for posting that to us Joe. I’ve just sent my letter of satisfaction off to the court. Let’s see how long that takes to clear and by how much.
Can’t wait for my score to soar too.
Jackie says
I have a debt that was settled from the credit file after six yrs. It was handed over to debt collector s who are still chasing me for payment. Do I have to pay for this? It’s no longer on my file?
What can I do?
Sara (Debt Camel) says
See https://debtcamel.co.uk/debt-not-on-my-credit-file/.
What sort of debt was this? Who was the original lender and has it been sold to a debt collector or just passed to one to be collected?
Jackie says
It was Barclays partner finance . black horse I think. For double glazing
James Moffatt says
Hi Sarah,
I have 3 defaults, all of which will be over 4 years old come September this year. Could you give me an idea of how many points I will lose? I am aware you said of a default is 200 points if older than 4 years but if it’s 3 all from the same time and 4 years plus old, how much would this impact?
Also, I have a CCJ from a parking ticket but it’s is going to be set aside as parking eye have agreed to set it aside. Does this mean I will gain 250 points (as this is not linked to a default)?
Thanks,
James
Sara (Debt Camel) says
Sorry, with a credit record with a lot of problems, it’s not possible to say how much difference some ageing will make or one disappearing – but well done with Parking Eye!
Plamen says
Hi James.
How did you contact Parking Eye, and what did you do so that they set it aside?
Thanks.
Sara (Debt Camel) says
If you have a CCJ, talk to National Debtline on 0808 808 4000 if you want to know if you have a case to have it set aside and for how to do this.
James Moffatt says
Thanks for the reply Sarah. Let’s say I have a perfect credit file apart from two defaults (so I know not perfect at all but entertain me). One default is 4 years old and the other is about to become 4 years old. Are you able to estimate what score change I would I see in total (so 200 decrease for 1 default, how much additional point decrease for the second)?
paulette says
I have 1 default and one CCJ. default due to drop off in two months and CCJ still has just under 4 years.
my credit score is currently 517 with noddle but is going up very slowly (10 points) per month due to me paying off my credit card in full every month.
can I get to at least a fair-good score when my last default drops off and its just the CCJ left. or will it go up until a certain amount and then stop going up until the CCJ has dropped off.
Sara (Debt Camel) says
The CCJ is very likely to prevent your score ever getting to good.
Could you come back in 3 months time and say what effect the default going has had?
paulette says
I will do … thank you
Diana says
Hello,
I just wanted to say that I had have a default from 2013 which I payed off in February. My credit score was poor for the last 5 years. I payed all my Bill’s and credot cards but the credit score just stayed the same, regardless what I did.
Weve applied for a mortgage and weve been accepted, my fiance has excelent credit score so that helped.
I just only loged in yesterday to check my credit score as I wanted to see if the lender checked my credit file. To my surprised, my Equifax credit score is EXCELENT!! Default is now mark as settled and I am so happy! I didnt expected my credit to go up but it looks like once default has been marked as settled, everything has change.
I worked very hard on my credit score, no late payments, no going over the limit on credit cards, paying majority of my debit off. It was a nightmare, but now default is showing green and I am just so happy.
Just wanted to let people know what’s happen once you pay your default off. I am still waiting for my credit score to go down, expecting to be just a mistake but will see what happen next month.
Thanks and good luck everyone
Ian says
Hi, I had a creation card and entered a debt management plan in 2013, most creditors defaulted me then but Creation didn’t. I have a payment arrangement in place for £2 per month, it was sold to Lowell in 2015 and I believe it is being incorrectly reported at the credit reference agencies.
On Experian it is showing as up to date with no issues on the face of things but, it has a balance of £2000 and a credit limit of £0, therefore making my credit utilisation very bad.
I have requested that a back dated default be added to April/May 2013 so that it will drop off my credit file.
My question is whether it’s better to have it defaulted (as I have a few others in 2013) or just change the credit limit? Thankyou for any help!
Sara (Debt Camel) says
Well you can’t use the account I assume, so any credit limit would be wrong. Ask Creation to add a default, if they do, Lowell will have to copy that.
AK says
Hi. Found this website looking information about CCJ. My credit score with onescore is 492, with credit karma 605. Because of other party not paying rent for a shared ownership property and it is on joint names (I pay mortgage, payments are up-to-date) CCJ was issued, it was done by housing association but it did not hit a credit as yet.
How will it affect my future remortgage capabilities, i want to remove other party from the mortgage(not to have any financial links) and take it on my own?
How long it will take to re-build credit to reasonable score in case it will go well below mid line?
Thank you for your advise.
Sara (Debt Camel) says
Were you aware of the rent arrears and the court case that lead to the CCJ?
The CCJ is likely to have a disastrous affect on your credit score and your ability to remortgage for a larger amount or to take the mortgage in your sole name for 6 years.
AK says
Yes, I was made aware..as we are going through a divorce and other party did not bother to keep her payments towards property. At a point I did not feel comfortable to pay for a mortgage and rent on my own as i won’t be able to afford it. I guess I am stuck now with CCJ for 6years.
Can my name be removed from ccj?
A K says
Update:
CCJ hit the file.
Kredit Karma – 536 ( from 605) 69 points drop
Works are in progress to rebuild score. Previously from 545 to 605 it took exactly 12month but there was no CCJ.
Any advice how to recover lost points quick?
Sara (Debt Camel) says
You can’t, this will take 6 years.
Well not unless you are inside the 30 day period when you can repay a CCJ in full in which case it will be deleted from your file. But you said “I did not feel comfortable to pay for a mortgage and rent on my own as i won’t be able to afford it” which suggest that you can’t do this.
Also if you can’t pay for the mortgage and rent on your own going forward, what is your plan? you aren’t going to be able to remortgage to have this all in your name if you can’t OBVIOUSLY afford it, and even then the CCJ will make a new mortgage VERY difficult. this has nothing to do with your credit score, please don’t fixate on those numbers which mean very little for mortgages.
Dan w says
Hi,
I currently have 5 defaults on my credit file in the last 6 years. 3 of the 5 are due to be removed following recent success on the back of irresponsible lending complaints leaving me with 2 defaults 1 in 2014 and 1 in 2016. Will having the more recent defaults removed from my file increase my credit score significantly considering a still have 2 older ones ( zero balance) ?
Sara (Debt Camel) says
It will make a difference as younger defaults get a larger penalty, but it’s hard to guess how much. Could you come back and say what happens?
CMack1 says
Hi There
I have a CCJ from July 2013 that I have settled in full and 3 x defaults from September 2013 that I have also settled in full. These obviously drop off next month and September of this year. I have a Aqua Credit card that I use now and pay off in full each month as well as credit ladder proving i have paid my rent for the last year on time. So things have significantly improved since my bad time in 2013. My question to you is, I am applying for a mortgage in the next few weeks, are these old settled defaults going to be ab issue, or will i need to go to a bad credit mortgage broker? Will my credit score improve as and when these drop off and if so, by how much. Thanks
Sara (Debt Camel) says
Well done – what a turn around.
If you have no other CCJs or default or missed payments, your credit score should go up a LOT.
re mortgage application, when were the defaults settled?
CMack1 says
Thank you. That’s really nice.
Defaults were only settled recently but they are nearly 6 years old. I have read that lenders usually look at the age if them and if they gace been settled.
Thanks
Sara (Debt Camel) says
If the defaults were only settled recently you are going to have to be pretty careful who you apply to, as many lender like defaults to have been settled for over a year. It might be easier to wait until your credit record is clean after September? Or you could talk to a good mortgage broker after the CCJ has gone in July.
CMack1 says
Ok thanks. I have been chipping away at the balance of the defaults for the last 3 years monthly. So I haven’t just left them I’ve been making monthly payments for years. Does that go in my favour?
The ccj comes off next Tuesday so will to a good mortgage broker then?
Thx
Sara (Debt Camel) says
There are no set rules here, each lender makes their own assessment. Many just like you to have settled previous problem debts more than a year ago – so you have a year free of any problems. But once the debts are not on your credit record after September, the lenders won’t be able to see you had a problem :)
CMack1 says
Just wanted to let you know that my settle ccj came off and my score jumped up 105 points to fair and I have had an agreement in principle by Halifax on a mortgage :) I do have a healthy deposit. I just wanted to let you know. Cheers
Sara (Debt Camel) says
thanks for the details & good luck with the mortgage
Mel says
Hi Sara,
We are in the process of requesting a mortgage and only now have realized we had a CCJ to our credit file which was sent to our old address. We have since pad it off. It was genuine mistake( had we seen the parking ticket, we would have paid it off immediately). Would a NOC help In this instance? How do you add a NOC to Experian and Equifax please?
Do we need to add a NOC to all the Credit reports or just one?
Thanks,
Sara (Debt Camel) says
The NoC has to be added by you to all 3 CRAs – see https://debtcamel.co.uk/notice-correction-credit-record/ for how to do this. Are you talking to a mortgage broker as this CCJ is going to make getting a mortgage much more difficult.
LTaylor says
Hi Sara,
Sorry to bother you, just checked my credit report with “Check my file” and found a CCJ which has 20weeks left before it drops off. This was fully paid last year but is still showing as “active”, could you tell me why it would still be classed as “active” and when it drops off my file in January should my credit score improve. This is the only thing showing as anything adverse as I’ve completely paid off my mortgage, have no credit cards, I do have a mobile phone contract which shows as always paid on time and a Paypal credit line which shows regular paments going out – both of these are on DD.
Sara (Debt Camel) says
It is still classed as active because the creditor hasn’t had it marked as paid. See https://debtcamel.co.uk/paid-ccj-satisfied/ for what you can do, but with only 20 weeks to go, this hardly seems worth the bother.
By the way, Check My File is extremely expensive – you would do better to cancel the subscription and use the free checkers. It also doesn’t give you Experian details, only the credit score, so it isn’t as comprehensive as you might think. See https://debtcamel.co.uk/best-way-to-check-credit-score/
Tom says
Hi Sara,
I applied for a mortgage AIP and was declined due to my credit score. The lender said that as soon as my score improves they can process the application again and if it passes they will offer the mortgage.
I have a lot of card debt (£40K balance with £50K total credit across 4 cards) and a retail finance loan of £1500.
I’m about to reduce the total debt by around 20K. Should I use £1500 of this to re-pay the retail finance loan or just on the credit cards?
Also, realistically, how soon is my score likely to improve as I have found a property and afraid of losing it. Is getting the utilisation rate under 50% going to help much or does it really need to be under 30% to improve the score?
Thanks in advance
Tom
Sara (Debt Camel) says
Hi Tom,
I’m not ignoring your question, but can you say some more about the mortgage you need – how large is it? what is your income? how large a deposit do you have?
is the 20k to clear debt coming from reducing your deposit?
did you apply directly to a lender or through a broker?
also what do you mean by a “retail finance loan” – is this just a normal bank loan or HP or something? how large are the monthly payments on this loan?
Tom says
Hi Sara – thanks for quick reply.
Income: £75K
Property: £236,250 (shared ownership)
10% Deposit
£5K of the £20K is from deposit but will be put back in next month.
Retail Finance loan is some electronic euqipment from an online retailer so HP, I guess? It’s £83 per month with £1350 remaining.
There is actually another loan with O2 for a new phone. Perhaps this has an impact also?
I was told that only Halifax and Virgin do shared ownership mortgages for sole traders so the broker I was speaking to said he couldn’t proceed with the amount of debt, so I ended up going to Halifax directly.
Sara (Debt Camel) says
where would the other 15k to clear debt be coming from?
so £236,250 is the mortgage you would need with a 15k deposit?
what would the rent be?
£3k will “be put back in next month” – does this mean you are regularly throwing of a 5k spare each month? If so, why have you amassed such a huge amount of debt? (That probably sounds critical, it isn’t, just trying to make sure nothing important has been missed.)
Tom says
Thanks again for quick response.
I wasn’t looking to buy but then an ideal property came up. I’d been investing into stocks & shares ISA (which has outperformed my worst credit card interest rate by a long way) and I also use one of the cards for business expenses so a fair amount is to be reimbursed by a Client I’m working for in the next month.
The deposit will actually be £23,625 (10%) meaning the mortgage is only £212,625 which Halifax said won’t be an issue and it’s only my credit score that is preventing them offering a mortgage. I have the deposit already in my ISA and Premium Bonds. As I need to act quickly to secure this property, I’m thinking to use £5K of the deposit in the hope that reducing the card debt by 20K will improve my score and that I’ll have it by the time I would need to provide evidence of savings to the lender next month.
So my original question is would it be better to pay off the HP or reduce the card debts, and can I expect a big improvement going from 80% to under 50% within the next 2 months, or do I really need to look at using more of the deposit now to clear down the balances and try to build it back up again? If I can’t get this property, I don’t want to take money out of my ISA as I can’t pay it back in again.
Sara (Debt Camel) says
So it sounds as though the money is coming from selling equities in an ISA. Is that all your equity investments? Honestly it would be good to pay a lot more off your credit cards if possible.
The best way to get your credit score up is to pay off as much credit card debt as possible as that will get your utilisation down.
BUT
1) if there are any affordability considerations at all for the lender, then paying off the loan will reduce your monthly outgoings by a lot more than paying that amount off a credit card.
2) Halifax may be using their own calculation of your credit score, not Experian’s, Equifax’s or Transunion’s. So although the article above mentions 30% utilisation as an important benchmark, it may not be for Halifax. They may say 20% or 50%. This is where going through a broker that is familiar with particular lenders can really pay off – but obviously that isn’t possible in your case. So you are to a large extent left guessing what Halifax may want.
3) Halifax may just have said “it’s your credit score” as some sort of shorthand for “you have borrowed a daft amount”. It doesn’t matter how low the interest rate is on your credit cards, they could all be at 0%, it is still a very foolish move for someone with the smallest intention of buying a house to have money in the stock market and stack loads of credit card debt. You may think it has been a savvy financial move – no mortgage lender is likely to agree with you.
4) You have to guess whether Halifax would like you to reduce the utilisation of your cards or to pay off and close a couple of them. Which wouldn’t improve your credit score as much but may look a lot safer to a mortgage lender. If you just cut the utilisation, the lender may think you will just choose to furnish your new house on your credit cards…
“If I can’t get this property, I don’t want to take money out of my ISA as I can’t pay it back in again.” yes you can, well most of it, unless you have used the whole of 20k ISA allowance for this tax year already. I suggest you forget about that as a problem. if you don’t get this property, there will be other ones.
Tom says
I’ve passed the affordability checks. It was a fail on the credit check using external CRA. In certain circumstances this can be over-ridden by putting a case forward explaining the reasons for the debts (reimbursable expenses alone covering about 30%) and by saying they will be cleared before taking out the mortgage, but in my case they said it needs an improved result from the CRA to go through.
I fully agree with Point 3 as I wasn’t actually looking, however this particular property has made me consider applying as there are many key factors unique to this that I can’t find in other properties, (one of which is a particularly low rent on the 75% share).
So in summary, it’s not Halifax, but my credit score I need to improve and very quickly as there is only.
With a positive score, Halifax said they would lend over £300K with zero balance and I haven’t even factored in a family gift (as a last resort) into my own calculations.
Anyway, am I likely to see a jump when reducing from 80% to <50% utilisation within 1 month, 2months, etc?
Halifax have no objection to conducting another soft search as soon as that happens or do I use all my deposit this month and then try to build it back up again + family gift nearer to the completion/exchange. I just need to give the housing associated a rough idea of what we can expect before I can get an AIP and progress to the next step.
I'll speak with the broker again and see if they can help. Thanks for your help so far.
Sara (Debt Camel) says
All credit checks use external CRAs. And often the CRA provides the lender doing the search with “a score”. That doesn’t mean it is the same score that your CRA report shows. The CRAs have different “model scores” and a lender can choose which score they want to pay for. For example, some model scores are affected if you have recent payday loans, but your headline CRA score on the report you see does not take into account the payday loan flag when doing its calculation.
Here is an article on US credit scores. I am linking to it because it gives an idea of the complexity of the situation, not because any of the details are relevant in the UK where FICO does not exist. https://www.forbes.com/sites/robertberger/2017/01/06/which-credit-score-do-lenders-actually-use/#550238df30b1>
Yes, you should see your credit score improve if you pay off 20k out of 40k. I can’t guess whether it is best to clear all of one card, half of another or reduce them all by the same proportion. Or whether you would help or hinder your chance of getting the AIP if you close a cleared card. If I had to make a guess, I would probably suggest paying all the money off the cards excluding the one you use for business expenses as you have an excellent reason for carrying a temporary large balance there. but I don’t know if Halifax is interested in excellent reasons.
Lenders report to the CRAs monthly. So if you pay something off today, it may be reported to the CRA next week or in 4 weeks time.
Tony says
Hi
I had a CCJ incorrectly entered against my name.
I lost a case against a parking company – fair enough – however I paid within 24 hours of the judgement.
Anyway, long story short, the Legal company “forgot” to inform the courts so the CCJ was entered.
I’ve had it removed easily enough because I had all of the evidence to show it should never have been entered in the first instance but my score has only improved on Experian by 99 points, not 250.
Can you possibly explain? I’ve already messaged Experian for their explanation and am awaiting what they say.
Thanks,
Tony
Sara (Debt Camel) says
had your Experian score dropped by 250 points when the CCJ was added?
Tony says
I don’t honestly know – it was never visible on clearscore which I’d previously used.
It was only because of divorce and needing to start looking at morrgages that I signed up to credit expert at the request of a broker, in order for them to see my full report that I spotted it.
The CCJ went on just over a year ago.
Not particularly impressed with Clearscore, actually, but that’s a whole different argument.
Annon says
Hi, could you please help me. A few years ago I got into some real debt from borrowing from a payday loan company and I ended up in heaps of debt and a few defaults but I have worked every hour under the sun to put these right. I am now only down to 2 smaller loans that equal 1,500 together and I have no other credit cards or loans as I have paid these off -these had to be payment arrangements to be affordable so they are on my credit file as late payments. I am now at the time when I need to rent a house as I am really struggling with my accommodation but with my credit score being so poor and the defaults even though paid are still on my credit file how can I improve this as I am afraid I will be rejected to rent.
Sara (Debt Camel) says
Have you looked at making affordability complaint about your loans? these are mainly aimed at getting a refund of the interest you paid but they have the big added benefit that if you win the case, negative marks are deleted from your credit record by that lender…
You can complain about payday loans: https://debtcamel.co.uk/payday-loan-refunds/
About other larger, longer term loans: https://debtcamel.co.uk/payday-loan-refunds/.