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...]
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.
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...]
Credit cards – to close or not to close?
If you have a credit card or catalogue account with a zero balance, should you close it? You may be worried if this would help or harm your credit score. But that isn't the only thing to consider. And what impact will it have on a mortgage application - cr4edit scores aren't the only that matters to a mortgage lender. This decision is important to get right if you are trying to clear your … [Read more...]
Adding Liability Orders to credit records – a bad idea!
County Court Judgments (CCJs) are added to people's credit records, so why shouldn't the same be done for Liability Orders (LOs) for council tax arrears? This is a really bad idea, involving major problems and costs for local authorities and magistrates courts. These would massively outweigh the potential benefits. Magistrates Court Liability Order processes are not comparable to County Court … [Read more...]
Identity theft – what you need to do
This article grew out of a reader's question. Mrs J, asked: Since February my husband has started to receive letters from WageDay Advance, Satsuma and QuickQuid saying that he has loans with them that need repaying. He doesn’t have any loans. We have sent Prove It letters to all three. We have now had letters saying that WageDay Advance and QuickQuid have passed the account to debt … [Read more...]
Mortgage repossession and your credit record
A reader, Mr D, asked: I had a mortgage shortfall from 2006 after my house was repossessed by Natwest. As a mortgage shortfall stays on file for 12 years, I decided to make a Full and Final settlement offer in January this year which they accepted and which has now been paid. Now with both Equifax and Experian, the account has disappeared, it doesn't appear in my open or closed accounts. … [Read more...]
LOQBOX – how saving can improve your credit score
LOQBOX is a clever product that can help improve your credit score as you save regular amounts of money. And there are no fees at all. Which sounds good, doesn't it! I'm tired of suggesting that people with poor credit scores should get a "bad credit card", use it each month and repay it in full each month. That works work well if you can stick to the plan... but one 24 year old I was talking … [Read more...]
How to add a Notice of Correction to a credit record – and is it worth it?
Finding something negative on your credit record is bad enough - but it feels a lot worse if you think it is wrong or unreasonable. You have the legal right under the Consumer Credit Act to add a "Notice of Correction" to your credit report if you feel something is misleading or you want to provide an explanation. What is a Notice of Correction? A Notice of Correction is something you … [Read more...]
Can I get another car after VT or is part exchange better?
A reader asked: I want to terminate my PCP car finance. The car's fine, good condition, but we now need a bigger car. According to my contract I can hand it back. But I am going to need to get another car, so I am worried this will harm my good credit record. Would part exchange be better? Your right to end a PCP contract early Personal Contract Purchase (PCP) is the most common way to buy … [Read more...]
Paying a defaulted account & your credit score
A reader asked if starting to pay a defaulted account will help his credit score. The simple answer is No! But there are very good reasons why paying defaulted debts will improve your general credit situation, making it easier for you to get a loan, a mortgage or a credit card in future. That credit rating number isn't the only thing that matters! To start, it's good to know what your credit … [Read more...]