Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Credit rating question

5 replies

Cel982 · 21/02/2016 01:12

Any insomniacs know anything about how credit ratings work in practice?

DH had a recent cock-up with his credit card. Basically, we opened a joint account and he switched his salary to be paid in there. He still kept his old personal account open, and had a little-used credit card which was paid by DD from that account. That account gradually drained as there was no further income going into it, and the occasional outgoing. Then he must have bought something on CC for which there wasn't enough left in the account to pay the DD. Unfortunately we had moved house in the interim, he hadn't given the bank his new address, and so the bill remained unpaid and his CC was cancelled. When he did find out - a few months later - he paid the debt (about £300) in full immediately.

So yes, it was a balls-up, and absolutely his fault, which he fully accepts, but it was an organisational problem rather than a solvency one. My concern is how this will affect our credit rating when we come to apply for a mortgage in the next year or two? We have good earning potential and no other debt at all, until this little snafu we would have been model applicants. Will it have a major impact? Should he apply for a new CC straight away so he can start 'building up' his credit rating again (is that even how it works)? Any advice greatly appreciated!

OP posts:
maddiemay · 21/02/2016 07:32

I sympathise as I did something similar although even stupider really - ordered some things from Next and then a week later my dad died Sad and I just had no memory of ordering anything!

Like you I paid the balance as soon as I realised. I don't think it will have a terrible effect at all. If I were you (I'm no expert) I'd leave it three months then get a new credit card. I think once you've paid them off it does start showing as a positive again :)

Iamnotloobrushphobic · 21/02/2016 07:37

Late payments (defaults) stay on your credit record for up to 3 years, even if repaid. You can ask for some explanatory notes to be added to the default but I'm not sure if you need to ask the creditor to add the notes or if you can ask the credit reference agency directly.

19lottie82 · 21/02/2016 08:14

Late / missed payments stay on your history for 6 years (not 3).

I'm afraid the fact that it was an "organisational rather than solvency" error, doesn't make a jot of difference!

TBH it's not going to help with a mortgage application but if this is the only mistake you've made in the six year window when you come to apply, then it should still be doable. If you run into any problems, a broker should be able to help.

Cel982 · 21/02/2016 10:41

Sigh. Thanks for the info. It's really irritating, as it was completely unnecessary, but he was very stressed out with work at the time and a lot of other things fell by the wayside. It won't happen again, but obviously the bank aren't going to take our word for that Sad

OP posts:
19lottie82 · 21/02/2016 18:57

Some lenders are more others than others, while some will allow a "one off mistake" that's why I would advise using a broker if you run into any problems when the time comes to apply. Good luck!

New posts on this thread. Refresh page
Swipe left for the next trending thread