Improving credit

[JumpingJackFrost]

Hi! I'm after a bit of advice please.

I've recently got my finances under control. My income exceeds my outgoings, The only debt I have is my mortgage which is about half of the value of my house now and my repayment history is excellent.. I'm never late with payments. I have no recent searches on my account. However, my credit score is coming out as "fair" and the reason seems to be that I have no current "credit limits" available to me. I paid off and got rid of my last credit card last year because I found it too tempting and kept wasting money on things I didn't need.

I'd like to improve my credit score obviously but is applying for one or more credit cards and trying not to use them the only way to do this? Or is there another way? Thanks in advance for your advice.

Make sure you've done all the other basic things first like being on the electoral roll - this will impact your credit score. Also make sure that your credit check is all correct (I check every few months with all 3 providers) to ensure nothing inaccurate/fraudulent is bringing it down. Make sure your score isn't being damaged by someone you're financially linked to too!

Don’t focus on your “score” essentially it doesn’t actually exist, no one sees it apart from you (and this includes potential lenders). It’s your credit history that is important.

Just focus on making sure existing commitments are paid on time, and that you have a reasonable amount of existing credit that is used responsibly. Being on the electoral register also helps, as does not being linked to anyone with a bad credit history.

Why do you want a good credit score... you already have a mortgage, you don't have any other debts by the sound of it, so you probably won't take out any debt in the future.
I agree about keeping an eye on your Statutory Credit Report and doing things like making sure payments on the mortgage remain consistent and that you are on the electoral role. You may find some utility companies are reporting such as mobile phone provider, electric/gas/water - some do and some don't. So there are things that are keeping your credit history ticking over.

Found a guide that might help to understand what lenders see:
www.transunion.co.uk/resources/tu-uk/doc/consumer/transunion-understanding-your-credit-information.pdf

Thanks for taking the time to reply.

I'm on the electoral roll in the same property for 18 years so that's all ok.

No other financial links to anybody and never have had.

Just this:

and that you have a reasonable amount of existing credit that is used responsibly

I have no credit now as I paid off then cancelled all of my credit cards due to them dragging me down in the past (too much temptation)

Why do I want a good credit score?
Mainly because in the next year or so I'd like to change my mortgage so that it is paid off sooner. I tried to change it a few years ago and got turned down by several places which has spooked me a bit.

Mortgage is done on affordability. I therefore wonder why you were turned down previously. Your current lender will most likely continue providing you with a mortgage as they have an existing relationship with you and you have no missed payments. You may find that a broker can shop the market and find other lenders given your situation at the time.

I just obtained my Statutory Report from Transunion and I saw that a bank was reporting to them even though I don't have an overdraft with the bank. I do recall the back providing an overdraft and when I noticed that they had done so, I slid the slider on the app to £0 to turn off the overdraft facility. So maybe some financial places you deal with are reporting every month even if you don't have a debt with them. I expect that can help to prove identity and shows lenders that you have an account with x bank but that you are not actively using an overdraft.

With the mortgage applications that got turned down, did they get as far as having access to bank statements and payslips? Maybe they turned you down based on income and/or the value of reoccurring bills. That sort of thing can be something they are more interested in as they are seeing how affordable the mortgage would be for you.

Could be @nannynick I was in a worse financial position than I am now. I got told at the time that it was due to my credit rating but perhaps there was more to it than that?

I'm planning to give it a full year of being financially "sorted" then try again.

So probably after the summer holidays.

Best thing to do is probably get one credit card with a small limit and use it to buy something that you'd normally buy anyway (tank of petrol, subscription to Netflix or similar or some groceries) and set up a direct debit to pay the balance off in full every month.

Don't use it for anything else if you're worried about seeing it as free money rather than a payment tool.

What do you mean by 'change your mortgage so that it is paid off sooner'?

You might need to change your mortgage to make sure you're always on the best possible rate, but whatever mortgage you have, you're usually allowed to make overpayments to pay it off quicker, so you might be able to do this anyway, but need to check for limits and penalties.

Your existing mortgage provider might also be able to offer you a better product without a full credit search as they want to keep you as a customer and know your payment history.