A reader asked: I’ve recently paid off my 2 defaulted credit cards and I have been paying into Loqbox for the past 4 months (£70). I got an email from Clearscore saying I can get a Capital One credit card. This is the first time in a long time that I have been offered a credit card because my credit has been so poor but it is slowly improving. Should I apply for this? If I do what is the best … [Read more...]
Credit Ratings
There is a lot talked about credit ratings on the Internet but it can be very confusing and sometimes even wrong!
If you can't make the proper payments to your debts, your credit rating will suffer. But different debt options affect your credit score in different ways, so I've written these articles looking at the details of each situation.
And most importantly, when will your credit rating improve and what can you do to help this.
See The top ways to check your credit records for details.
Covid-19 – credit score protection, but will it be harder to get credit?
In March 2020 Experian, Equifax and TransUnion, the three big UK credit reference agencies, agreed that having a temporary "payment holiday" with a lender because of Coronavirus problems won't harm your credit score. The FCA, who regulates lenders in the UK, then set out detailed rules about payment breaks for most kinds of debt, including mortgages, unsecured loans, credit cards, catalogues, … [Read more...]
“Will paying off debt improve my credit rating?”
A reader asked if his credit score would improve if he paid off some debt. First a useful warning from Experian: There’s no one credit score or magic number – different lenders score differently. But a good place to start is by looking at what exactly is on your credit records. There are three credit reference agencies in Britain and you have to check all three as they may have different … [Read more...]
How to improve your credit rating after a DRO
A Debt Relief Order (DRO) lasts for one year and then your debts in it are wiped out. But it shows on your credit record for six years. This article looks at what should happen to your credit record during the DRO year and after it has finished. Some of your creditors may have go tt this wrong, you need to ask them to correct any problems. You can start to improve your credit rating after … [Read more...]
“Must I pay a debt that’s not on my credit report?”
A reader asked if she has to pay a debt that she can't see on her credit record. Many people think that checking their credit record is a good way to get a complete list of their debts. And they look forward to a defaulted debt disappearing after 6 years because then they don't owe the money anymore. These are myths - and although they sometimes are right, they often … [Read more...]
Don’t let credit rating worries make your debts worse
If you have too much debt, you may not want to do anything that will harm your credit score. But do you have any better alternatives? That depends on three factors: what is your credit record like at the moment? If it isn't good, then it isn't worth trying to protect! Check your credit score now, so you have accurate information. can you make the monthly payments to your debts? The … [Read more...]
How to get a paid CCJ marked as Satisfied
A reader asked: In August 2019 a CCJ was registered against me for £211. I paid off the balance, but not within the month. I have bank statements to prove its been paid. On my credit report it shows the status as “active” even though I have paid it. I’ve contacted the debt collector multiple times but they say as it’s an old case it’s no longer on their system and they can’t help me. I don’t … [Read more...]
When can you get a default removed from your credit record?
"This default is destroying my credit score - how do I get rid of it?" This is a very common question! It's sometimes asked when people's finances have improved and they are trying to clean up old problems on their credit history as fast as possible. Or sometimes the default feels unfair for some reason. I will look at various cases to see what - if anything - can be done for each of … [Read more...]
“Can mortgage lenders see old debts, no longer on my credit record?”
A reader asked: I know a debt drops off my credit file 6 years after it was settled or defaulted. I just want to ask when I apply for a mortgage, can the lender dig up unpaid debts if they are no longer showing on my credit report? This is a common question. The answer is Yes, sometimes because a lender can see other information that may show the debts. Let's look at what the lender can see, … [Read more...]
UK credit records & scores – not fit for purpose!
In summer 2019, the Financial Conduct Authority (FCA) has started a Credit Information Market Study. In the consultation on its terms of reference, the FCA asked: Do you consider that the credit information market is working well? I think it has grown up over the years into a poorly understood, complex system which has many problems. It isn't working well for consumers or lenders. The … [Read more...]