How to improve credit score?

[under the ivy]

My credit score is considered poor due to not paying a store card on time a few years ago. I managed to pay off the debt in full but it’s still ruining my credit score. I pay everything on time either by DD or manually. I’m hoping to get a car on finance in the next few months but I feel I won’t be able to. I know paying for a car in full is ideal but I’m not in that position yet.

Any advice welcome

 

[#chicklet]

I signed up to one of those free credit reports and the only negative thing on there for me was that I didn’t have a credit card. Apparently it looks good to have one and for them to see you are not spending over a certain % of the limit and you are making repayments regularly, either in full or more than the minimum payment.

How long ago was your store card debt?

 

[BettyCrocker]

Articles

Learn how long different types of information such as late payments and collections may stay on your credit report.

www.equifax.com

this gives some useful info on how long things will stay on your credit report, which is what will be bringing your credit score down. Missed payments even on closed accounts can still appear for up to 7 years.
this doesn’t necessarily mean you won’t be approved for credit for a car though, have a look at car finance for those with low credit scores etc to see if there’s anything there that can help?

 

[under the ivy]

I signed up to one of those free credit reports and the only negative thing on there for me was that I didn’t have a credit card. Apparently it looks good to have one and for them to see you are not spending over a certain % of the limit and you are making repayments regularly, either in full or more than the minimum payment.

How long ago was your store card debt?

4 years ago. I made regular payments but became unemployed & in a poor financial position so I couldn’t pay a lot. Managed to get back on my feet and pay it off in full about 18 months ago.

 

[grumpycat]

One of the things I remember reading when I was sorting my credit was there isn’t anything called good credit.
I’ve never had a credit card and I got a mortgage and car finance.

Don’t trust numbers on the credit facilities - it doesn’t matter. Just be aware of any defaults or missed payments as they stay there for 6/7 years so you have to be aware of the long term aspect
Having defaults doesn’t mean it’s the end of the world either
Moneysavingexpert has great advice

 

[MrsWolf]

I obviously don’t know your full situation so this may be irrelevant but I would also check if you have any associates on your credit file it may not just be a missed payment affecting it. My husband had an ‘association’ with his ex from longer than 7 years ago and that was bringing his credit score down massively. When we were applying for a mortgage we were told to use the website checkmyfile.com (you get a thirty day free trial) and you can see any associations/missed payments etc. My husband was able to remove his ex from his file through that website!

 

[under the ivy]

Thanks for all your replies. I’ve signed up to Money Saving Expert Credit Club so will have a look through the tips stated on there. I’d ideally like a credit card to make big purchases and pay off a lot more than the minimum each month, to show I can pay on time etc, but I doubt I’ll be accepted by any.

 

[mcfeez]

Tesco do a 'foundation' credit card specifically for people looking to build their credit rating. The limit they will give initially is quite low (I think around £600) but will go up.

 

[under the ivy]

Tesco do a 'foundation' credit card specifically for people looking to build their credit rating. The limit they will give initially is quite low (I think around £600) but will go up.

I’ve applied for this this afternoon, thank you for recommending it

 

[whatsfortea?]

my partner doesn’t have the best credit score which we’re trying to improve to get a mortgage, he has a credit building credit card. It has a £1000 limit and every month he only puts £20-£40 fuel on it and he pays it in full and on time every month via the app

 

[AutumnSpring]

My credit score is considered poor due to not paying a store card on time a few years ago. I managed to pay off the debt in full but it’s still ruining my credit score. I pay everything on time either by DD or manually. I’m hoping to get a car on finance in the next few months but I feel I won’t be able to. I know paying for a car in full is ideal but I’m not in that position yet.

Any advice welcome

Just to make you aware, getting a car on finance is actually more financially smart than paying for it outright in cash. You may as well throw money out the window on the motorway if you pay cash. By getting it on a PCP deal you are much better off. Also put down as little deposit as possible. Having the car on finance will also help build your credit score.

In regards to assets:
If it appreciates = Buy it
If it depreciates = Lease it

my partner doesn’t have the best credit score which we’re trying to improve to get a mortgage, he has a credit building credit card. It has a £1000 limit and every month he only puts £20-£40 fuel on it and he pays it in full and on time every month via the app

To follow on from this point.. I also know you are better off spending £10 in ten different shops (total spend £100) than spending £100 in one shop. Something to do with number of transactions on your card and ability to pay them off. It looks like you are more reliable to lend money to!