Is there anything I can do to make my credit score better

CanImakethisbetter · 2023-12-28T18:27:22+00:00

Just some background. I left my husband 8 years ago. Just after I left and even after divorce, debt in joined names kept showing up. Some I managed to get the companies to agree it was his debt, someone of them I ended up paying half of. i was a single parent, ex was a shit, I earned ok but ended up putting things on credit cards (food shopping etc) to get by. I ended up with about 14k debt. I entered a DMP. I was on it for just less than 3 years and an investment I made, years before, made it possible for me to clear the debt. I cleared it in August 2021. The only debt I have is my mortgage which has never had a missed payment and is small (£60k) I have one default (not the mortgage) from November 2020 showing on my clear score account. i have missed payments showing from 2019, 2020 and early 2021. And this one default. I have had several wage increases and can save £400-£500 per month now. So have started investing again. I would like to move home in 2024. Wondering if I should use the disposable income in another way. Is there anything I can do to improve my credit score or is it a case of just waiting it out? I use clear score as it’s easy for me to understands. I am ND and I find a lot of the others really complicated. Any advice would be greatly appreciated.

Wolfpa · 28/12/2023 19:11

Clear score isn’t the best one to use all of the major companies use Experian and Equifax.

The basic Experian package is free I would recommend you look on there first and ask someone to help you read it. Banks are often willing to help or there are often services at the library who can help you read them.

Are you on the voters roll? This is a quick free way to improve your score.

otherwise using credit cards and paying them off in full every month also works.

stay away from pay day lenders and applying for lots of credit as this will have a negative effect.

KievLoverTwo · 28/12/2023 19:23

Make sure you are on the electoral roll

Do not move house, length of being in a house matters

Get an overdraft with your bank, even if just £50, but never use it

Don't switch bank

Close down any extra bank accounts you might have lurking around, ditto credit cards

Do not gamble from your current account, get a Revolut card if you like to play the lottery or gamble, bung cash on it, banks can't see its content

Do not do PayPal buy now pay in three chunks or anything remotely similar

Apply for a credit card for an amount far smaller than you know you can get, buy some food shopping on it once a month, set your payments to 'pay in full' every month - seeing that you can responsibility handle having credit is something mortgage companies look for - completely debt free people have lower credit ratings than people who have debts but pay on time! o_o

You could also seek advice from an experienced mortgage broker. I imagine they have seen low credit ratings before and know what clients need to do to improve them.

Do not spend all of your disposable income each month - it needs to look like you have enough left over each month for house maintenance, times of financial strife, etc

Have a savings account

KievLoverTwo · 28/12/2023 19:27

KievLoverTwo · 28/12/2023 19:23

Make sure you are on the electoral roll

Do not move house, length of being in a house matters

Get an overdraft with your bank, even if just £50, but never use it

Don't switch bank

Close down any extra bank accounts you might have lurking around, ditto credit cards

Do not gamble from your current account, get a Revolut card if you like to play the lottery or gamble, bung cash on it, banks can't see its content

Do not do PayPal buy now pay in three chunks or anything remotely similar

Apply for a credit card for an amount far smaller than you know you can get, buy some food shopping on it once a month, set your payments to 'pay in full' every month - seeing that you can responsibility handle having credit is something mortgage companies look for - completely debt free people have lower credit ratings than people who have debts but pay on time! o_o

You could also seek advice from an experienced mortgage broker. I imagine they have seen low credit ratings before and know what clients need to do to improve them.

Do not spend all of your disposable income each month - it needs to look like you have enough left over each month for house maintenance, times of financial strife, etc

Have a savings account

Oh and don't take out any loans of any sort. We bought 2k of John Lewis furniture last year repayable over 12 months and even with a high disposable income, it really knocked our credit rating. We ended up sending the stuff back so it was paid off in full within three months, and our rating shot straight back up again (we had also just moved house for the third time in 3 years, which they really don't like).

Original poster

CanImakethisbetter · 28/12/2023 19:33

Thank you so much.

I will have a look at Experian again. I didn’t realise the banks or even library would help. Thank you for that.

I am on the electoral register. I bought this house almost 6 years ago. How long would you suggest I should stay?

I do have an overdraft of £1000 but never use it. I don’t gamble at all.

I do have 5 bank accounts but I use them all. One is for my bills and disposable income. One I use for things like PayPal, where it takes a while to come out so I can move the money there and not forget it’s due out so I don’t over spend. One where I put food shopping money. Then one savings account for Christmas. And one for my emergency savings.

Should I reduce this down? I find having separate accounts has made it easier to make sure I don’t over spend and everything gets paid.

I will look at a credit card. I can put my weekly shop on and it can be paid off from that account.

OP posts:

SpringingJoy · 28/12/2023 23:43

Sorry but some of the advice below is wrong.

Having an unused overdraft will have zero positive impact on your credit score.

In terms of not getting a loan because it will reduce your credit score - again, wrong. When you take out any form of new lending there's often a temporary dip in your credit score. However, making the loan repayments in full and on time will eventually lead to an increased score. If your credit score is low and you're in the position to be accepted for a loan, over time it could be very good for you.

My advice would be:

Ensure you're on the Electoral Roll.
Sign up for Clearscore, Credit Karma and Martin Lewis' Credit Club (Experian). You'll have full access to your credit reports from all 3 agencies. Go through the details with a fine tooth comb and check there's nothing wrong.
Be careful when closing unused accounts. Length of relationship is important. If you have too many accounts, closing the newest would be better credit-score wise.
Look at Loqbox (12 month 0 APR loan). It can help very poor credit ratings quite a bit.
Agree with the credit card - getting one, using circa 30% of the limit each month and paying back in full each month will have a positive effect.

The biggest problem you'll have is the default. Check the details thoroughly. Was this default from one of your DMP debts? If so, what date did you enter the DMP and how long after was the default? It's possible you have a case to argue that the default is backdated to shortly after the start of your DMP - there have been many cases found in favour of the customer by the Financial Ombusman for similar. A default affects you less and less the older it is so backdating it as far as possible would have a positive effect.

KievLoverTwo · 29/12/2023 00:23

SpringingJoy · 28/12/2023 23:43

Sorry but some of the advice below is wrong.

Having an unused overdraft will have zero positive impact on your credit score.

In terms of not getting a loan because it will reduce your credit score - again, wrong. When you take out any form of new lending there's often a temporary dip in your credit score. However, making the loan repayments in full and on time will eventually lead to an increased score. If your credit score is low and you're in the position to be accepted for a loan, over time it could be very good for you.

My advice would be:

Ensure you're on the Electoral Roll.
Sign up for Clearscore, Credit Karma and Martin Lewis' Credit Club (Experian). You'll have full access to your credit reports from all 3 agencies. Go through the details with a fine tooth comb and check there's nothing wrong.
Be careful when closing unused accounts. Length of relationship is important. If you have too many accounts, closing the newest would be better credit-score wise.
Look at Loqbox (12 month 0 APR loan). It can help very poor credit ratings quite a bit.
Agree with the credit card - getting one, using circa 30% of the limit each month and paying back in full each month will have a positive effect.

The biggest problem you'll have is the default. Check the details thoroughly. Was this default from one of your DMP debts? If so, what date did you enter the DMP and how long after was the default? It's possible you have a case to argue that the default is backdated to shortly after the start of your DMP - there have been many cases found in favour of the customer by the Financial Ombusman for similar. A default affects you less and less the older it is so backdating it as far as possible would have a positive effect.

Sorry, yes, you are right about loans. Iirc the advice is not to take any out just before your application goes in.

Original poster

CanImakethisbetter · 29/12/2023 08:00

SpringingJoy · 28/12/2023 23:43

Sorry but some of the advice below is wrong.

Having an unused overdraft will have zero positive impact on your credit score.

In terms of not getting a loan because it will reduce your credit score - again, wrong. When you take out any form of new lending there's often a temporary dip in your credit score. However, making the loan repayments in full and on time will eventually lead to an increased score. If your credit score is low and you're in the position to be accepted for a loan, over time it could be very good for you.

My advice would be:

Ensure you're on the Electoral Roll.
Sign up for Clearscore, Credit Karma and Martin Lewis' Credit Club (Experian). You'll have full access to your credit reports from all 3 agencies. Go through the details with a fine tooth comb and check there's nothing wrong.
Be careful when closing unused accounts. Length of relationship is important. If you have too many accounts, closing the newest would be better credit-score wise.
Look at Loqbox (12 month 0 APR loan). It can help very poor credit ratings quite a bit.
Agree with the credit card - getting one, using circa 30% of the limit each month and paying back in full each month will have a positive effect.

The biggest problem you'll have is the default. Check the details thoroughly. Was this default from one of your DMP debts? If so, what date did you enter the DMP and how long after was the default? It's possible you have a case to argue that the default is backdated to shortly after the start of your DMP - there have been many cases found in favour of the customer by the Financial Ombusman for similar. A default affects you less and less the older it is so backdating it as far as possible would have a positive effect.

Thank you.

I have been with HSBC for 20 years and with Virgin (joined when it was Yorkshire bank) about 6 years. But I do use all the accounts.

The default was November 2020. I entered the DMP approx 2 years before. I paid it all off in August 2021. It was on a loan that was in the DMP. I will look into raising a case as getting it moved to the beginning would mean it would drop off sooner. In around May 2024 it will be 6 years since I entered the DMP.

OP posts:

Original poster

CanImakethisbetter · 29/12/2023 08:04

Also I just realised on my hsbc app I have my credit card account there. They won’t let me reorder the card. I assume because it was included on the dmp. Am I best calling and getting them to close the account?

and applying for another?

OP posts: