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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

so frustrated with my bad credit

41 replies

HellooooJenny · 01/10/2019 23:06

I don't understand why I have bad credit. I'm trying to get an iPad on finance for uni, and I can't. It's bloody £25 a month!?? I've never had a penny of debt, I always pay my phone bill and rent etc perfectly on time, I don't even have a credit card because I budget enough and earn enough that I don't need one etc.

And yet I can't even get finance for paypal or anything? Also can't get an overdraft on Monzo - looked out of curiosity because my boyfriend (who is in 11k debt and is currently unemployed) can get a £750 overdraft with them??

where am I going wrong?

OP posts:
aibutohavethisusername · 01/10/2019 23:10

It is because you’ve not had debt before. Get your credit rating free with Experian and you can then see what loans or cards you may be approved on.

2toe · 01/10/2019 23:12

Have you looked at your credit file and checked all information is accurate?
Never having had credit has an adverse effect on your credit rating, lenders want to see you have had debt and have repaid it.

Original poster
HellooooJenny · 01/10/2019 23:15

so I have to have debt to make myself look financially stable? that makes no sense :(

OP posts:
CandyCrush321 · 01/10/2019 23:18

Basically yes. Finance companies need to know that you’re capable of repaying debts on time - some won’t take the risk on a person with no credit to their name. The issue isn’t that you have bad credit, it’s that you have no credit. I would sign up for a credit card. Spend a little on it each month and then repay it in full before interest accrues. I agree that the system is b*llocks but that’s just the way it is!

HuntIdeas · 01/10/2019 23:20

Definitely check you’re credit rating. Are you on the electoral role? That can make a big difference

Otherwise, as someone said, get a credit card (try your bank or vanquis might accept you) and make sure you pay it off in full every month

In the meantime, can you get a second hand iPad?

italianfiat · 01/10/2019 23:21

How many places have you tried? That will also go against you.

paddingtonbearsmarmalade · 01/10/2019 23:23

I don’t “need” a credit card either because I budget enough & earn enough but I now have two:

  1. I use to pay my travel card costs every month and repay in full by direct debit. This is a cost I’d be paying for anyway but using the credit card for it shows I’m responsible with debt and builds my credit rating. It’s a very low % of my total credit allowed which lenders also like. Credit cards are also useful for consumer protection.
  2. I recently paid the deposit for a new (used) car and car insurance on my card & have used a balance transfer to pay this amount off over the year rather than depleting my now battered savings even more. This has a bonus effect of showing that I can pay down debt & also increases my credit limit quite dramatically so my total debt:limit ratio is in my favour.

It is silly that managing your money well can go against you for finance/credit options but you can use credit cards to your advantage and still manage money well with them :)

2toe · 01/10/2019 23:24

It’s about risk to the lenders, they have no proof you are able to pay or will pay a debt off and that makes you a risk to them. As advised by pp check out your eligibility for credit cards then spend and repay small amounts on it to build your credit rating.

LionelRitchieStoleMyNotebook · 01/10/2019 23:27

This happened to my gran, she was offered a John Lewis store card years ago and as she was Christmas shopping and it came with a good perk/gift she said yes. Having never had anything of the kind before, all bills paid on full when needed, no mobile contact etc and her mortgage paid off years before, she was rejected, she was apoplectic and like you struggled to think that if she had debt they would've given it to her, but because she always paid everything up front they wouldn't. It's essentially because you're an unknown quantity to them. If you borrow but pay it back you're a safe bet, if you borrow and dint pay it back on time they earn interest and charges. I was at uni at the time and it actually prompted me to take a credit card use it for my grocery shopping and pay it off regularly before the interest kicked in.

SamBeckett · 01/10/2019 23:30

@HellooooJenny I was in a similar situation a few years ago, I had just been made redundant. I went to my bank that I have banked with for close on 40 years and asked for £1000 loan which I would pay off over the next year but like you I have never had a credit card or any debt of any so I had no credit rating and they would not give me a loan , ridiculously they told me I could have a credit card with £5000 there and then if I wanted. Confused
I declined very quickly and managed to get by without the loan.

Have you got a local credit union , I have been told they are very good
( but have no experience of them myself )

MonstranceClock · 01/10/2019 23:32

I paid for my iPad through o2, with an airtime plan. I have appalling credit! Might be worth doing it that way?

TreacherousPissFlap · 01/10/2019 23:53

My credit rating rocketed (about 60 points IIRC) a couple of months ago. The mind boggling reason was that I was accepted for an interest free credit card to transfer my existing balance to, this effectively doubled my available credit.

I've not had the new card long enough for anyone to tell that I won't blow the lot on wine and dancing girls, but I suppose based on my previous financial conduct they think I won't Hmm

DH OTOH has no credit whatsoever and his rating is shocking.

which1 · 02/10/2019 00:00

I've been in that situation even after having a mortgage and with a perfect credit score. It was ironic.

You need to start with a card for people with poor credit. I got Capital One. Set up a direct debit to pay it off in full. Put whatever on there - I used it for takeaway pizzas - and after a few months of using the card and meeting the required monthly payments your credit rating will inch up and as your rating improves you'll be able to access the better cards eg Amex.

feeona123 · 02/10/2019 00:03

Credit cards are not just for debt.

I pay everything on a credit card and pay it off in full each month. I make money from each purchase on a cash back card.

LemonPrism · 02/10/2019 00:06

You've never taken out any loans? That is odd. I used PayPal credit for my uni laptop and it was approved in about 3 minutes.

IfNot · 02/10/2019 00:07

You have to remember, your credit rating isn't a moral judgment. Credit companies exist to make money from you. If they are not making money from you, then you are not a preferred customer, that's all.

LemonPrism · 02/10/2019 00:08

I'd never had any debt or loans or anything either so wonder why I was approved

Expressedways · 02/10/2019 00:15

Are you on the electoral roll?

Waveysnail · 02/10/2019 00:19

Could be accomadation - esp if you are in halls, not being on electoral role, notnhaving a credit history.

You might have more luck trying for a credit card with a interest free period to buy the ipad.

Moneysavingexpert is always a good website for advice

halloumi2019 · 02/10/2019 00:36

You obviously have a bad credit score because you don’t have a credit history. Why would you just randomly have a good credit score if you don’t actually use credit?

Companies don’t give you credit for banter, you’re an unknown wildcard to them - they don’t know whether you’ll pay up or never pay a penny. Whereas if you had years of meeting payments on credit cards/loans etc and no blemishes, you would be assessed as have a good credit score and come across more trustworthy to lenders thanks to past responsible management of your finances. Banks are risk adverse; if you don’t have any credit history you’re a risky customer, so you’re basically eligible for credit building products which have low limits and/or a high apr.

Just buy the iPad outright? Most students do not “need” an iPad for uni.

halloumi2019 · 02/10/2019 00:47

so I have to have debt to make myself look financially stable? that makes no sense sad

On come on, you’re fundamentally missing the point? They obviously do not want a customer who is perpetually stuck in debt, as your statement suggests. That is obviously not ‘financially stable’.

Lenders want customers who have previously paid off any debts in time and in full, which actually suggests that the customer is financially stable and responsible. Hence the term credit ‘history’ - you don’t have much of a credit history hence getting rejected.

unamullian · 02/10/2019 00:49

The only way you can get around that is to get a credit card. Build up credit. Use it and pay it off on time. Your credit will then start to build up. Make sure you pay it on time though otherwise you'll accumulate interest and it will make your credit score even worse.

Ginkypig · 02/10/2019 01:28

Iv never been in debt and although not rich had some money coming in but I couldn't get credit and got refused even a basic phone contract years ago etc I found out it was because companies won't give you credit unless you have had credit so I had no history for them to use as a basis to decide on.
Also you need to be on the voters register too apparently.

Eventually I got approved for both hp for a computer (no idea how!) and my bank gave me a credit card with a £500 which I use/d in small amounts regularly and paid it off in full every time by doing that I created a pattern.

Whyisshedoingit · 02/10/2019 01:57

Is this Sky Mobile by any chance?! There are forums full of people saying the same thing. Apparently they're ridiculously strict with credit for iPads

safariboot · 02/10/2019 02:10

As mentioned, little or no credit history means you're an unknown to the lender. Many lenders assume you'll be a bad borrower unless your history proves you're a good one.

I would check your statutory credit report to see that everything's correct. It's £2 per agency (there are 3 or 4 I think). And as others said, make sure you're registered to vote at your address.

The refused application for credit will probably itself be on your report and future lenders may count it against you.

Don't believe the marketing about "your credit score". There's no one 'score' you have, different lenders have their own criteria.