Scary credit report - beware

[baypond]

Yesterday my sweet little children managed to buy some fake goods from the internet, providing my account details etc in the process. Apart from the hassle of cancelling cards and changing bank account details, it was also suggested I look at doing a credit enquiry on myself. This would highlight any checks made and perhaps flag any fraudulent activity using my name.

I would regard my credit history to be pretty faultless, apart from the odd late payment on a credit card etc but to my surprise I only managed 1 star out of a possible 5 !

At this level it is considered that I would be a concern to any lender and certainly likely to have to pay a higher rate of interest on any borrowings.

Having looked at the reasons it seems these things are the culprits:

My mortgage increased ( It is a Northern Rock mortgage that allows me to borrow and pay down balances, the latest drawdown relating to renovation in France)

I paid off in full my RBS and AMEX cards because annual renewal fees were increased to silly levels and I deemed it stupid to continue them. The fact that this was at a similar time as the mortgage increase seems to have counted against me. In addition AMEX marked me as missing a month' repayment, even though I had cancelled the card 3 months earlier, and the missing repayment related to a later annual renewal fee which they (even) later realised I didn't need to pay and refunded the card back to zero.

Beware buying from NEXT online. It seems to me that rather than debiting my credit card, they set up an account in my name instead and charged the goods to that new account. I ignored the Next account letter not realising I had an account ( I thought it was my wife's account paid by direct debit), and so missed a payment. This is now on the list of negatives.

Finally, I sold a house 18 months ago to scale down (kids finishing uni and moving away), given the market we decided to rent for a while, and finally moved to our own house last year. These two moves in 18 months make us a bad risk as well.

So, in the last 5 years or so, we have missed two payments, prudently repaid cards and shut the accounts down, scaled down the house we have, and for my efforts recieved a bad credit rating.

 

[bubbles]

Yeah, but do you need credit?

Surely not.

We have no mortgage, no debts, a bit of savings and thus probably an apalling credit rating.

Doesn't bother me.

Don't want to borrow any money - don't suppose we could pay it back anyway given the present exchange rate!!

[Gastines]

What is amazing is the amount they let non-employed people borrow. I believe the main source of income to banks is provided by encouraging debt plus of course using your savings to do it.

Regards.

[Iceni]

Friend of mine could not get a mortgage a few years ago. The reason was that she had no credit cards, lived with her mother who also had no debt and they had no telephone that could be traced to them. They got a BT line installed and she got a starter mortgage.

Your house credit rating follows you so if like us you once bought a reposession it takes you ages to clear the debt rating.

Owe nothing except love and it is a nice feeling each morning. At some point the old bangers are going to expire but until then we will just carry on.

Di

[The Riff-Raff Element]

[quote user="Gastines"]What is amazing is the amount they let non-employed people borrow. I believe the main source of income to banks is provided by encouraging debt plus of course using your savings to do it.

Regards.[/quote]

I've not lived in the UK for six years, have no income there to speak of, and the bank still continues to extand me a £4000 overdraft facility.

I sometimes fantisise about blowing this on a single evening of mindless hedonism and loose women, but I'd probably put my back out or something.

[Panda]

Hello

My bank also allowed me a large ovedraft facility and large credit card limit during my time in France but in these credit crunch days getting a mortgage is much harder than it used to be.  I have been working for a UK based company during my 6 years of living in France so I have a good career history, all good so far. 

When I applied for a mortgage after my recent move back to the UK,the fact that I had not lived in the UK for the past 6 years was a big issue so much so that despite having an income and  8 years continuos employment status, well in excess of that required for the amount of money I was borrowing led to some lenders saying no at the outset.

I have managed to get a mortgage but it was tough and I only got it because my bank, who I've been with since my 20's knows I'm good for it.

If anyone is consdiering a move back, has not held a good balance in a UK bank account and will be starting a new job on return I would venture will not get a mortgage and even in renting made find they are seen as a bad risk. 

It was quite a shock for me really, I'm buying a small 3 bed house at less than half the value of the property I last owned in the UK so hardly asking for a huge mortage.  My credit rating is also poor apparently which I hate, I have never had any bad debt yet for my new BT line I will have to pay a deposit so get the line as due to my time in France I have no credit history which equals bad risk.

Panda

 

[Russethouse]

I'm pretty sure that Money Saving Expert ran a piece about building up a credit rating quickly, quite recently.

One of the tips was to go for 'expensive' credit cards but always pay off the balance monthly....

PS. Here it is : http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve

[Panda]

Thanks Russethouse, I'll take a look at that.

[Scooby]

The bizarre thing is that the credit scoring tool on Martin Lewis's site doesn't take into account your assets, income or net surplus each month. Looking at behaviours may give indicators of creditworthiness but common sense would say that these are in addition to income and net worth not instead of it!