Credit for those with an impaired history

[Allen]

I had a little trouble with my finances a few years ago and got a CCJ against my name even though I cleared that debt straight away. Rather than going to a company that offers to help when they can do nothing you can't do for free, does anyone know of any other ways to help improve your credit?

Either that, or can anyone suggest any companies that offer credit to people with a pretty poor history?

[Kimo]

I know this has been discussed before on here, not sure if it was on the old forums though either way searching may help find some more info. There are so many ways to improve your credit you just have to build it up. As well as credit cards you've got loans, overdraft, store account cards, mobile phones, mail order accounts, credit from high street stores the list goes on. All you have to remember is not to go straight in and get as much credit as you can. Future applications will not be looked on as highly if you are suddenly applying for as much credit as possible, looks like you have a cash flow problem and could also have problems paying them back. Mobile phones and store cards are pretty easy to get, just pay them off on time and as time goes on build up the ammount of credit you have available. All potential lenders want to see is that you know your limits, and pay back on time and are a responsible borrower. You'll then start to see your credit limits raised as the lenders realise you are reliable and before long your credit rating will be good. Capital One apparently offer credit cards to those with poor credit ratings, may be a place to start.

[CocoPops]

Kimo's right.

Basically, you gotta have credit to get credit.

CapitalOne do indeed tend to issue more freely than others, so apply for a cap1 credit card, then after 3 - 6 months of sensible borrowing/paying apply for summat else.

[Saracen]

Even those with disastrous records can get credit.

One way is to get a credit card which requires a deposit. Then PAY REGULARLY.

Some credit companies actually target those with bad records. There are two reasons :-

1) They tend to charge a slightly higher rate
2) Statistics show that people that have had problems are often surprisingly good risks.

The reason for 2) is that MANY (not all, clearly) people that have had problems apply the "never again" principle to uncontrolled personal finances. Even bankrupts can get credit - they might need a bigger deposit, etc., but after a suitable period, even someone with bankruptcy in their past can get a mortgage.

So, as Coco said, get a credit card (even at higher interest) and DEMONSTRATE a good history with it. Then build on that. It takes time but is by no means impossible.

[CocoPops]

Also, please bear in mind that any advice given here is not to be taken as gospel, please seek the advice of an independent monetary advisor.

All posts are the views of the poster and not those of Hexus.net.

Thanks,

Lee.

[blockers]

There was a program all about credit by that money guy with the funny voice on BBC (alvin hall?) Dont know if there is anything on the website about it

www.bbc.co.uk

Will

[TeePee]

Sometimes it's possible that an address is blacklisted because of one person who lived there. While it may seem extreme, try moving house (easily done if your renting or moving around anyway. You could also try applying using your middle name (which IS legal, it's still your name!). You shouldn't have too much trouble getting a card with a fairly low limit, and working up.

[Galant]

Screw credit cards, they're evil.

It's not the norm, I know, but budget well, spend only what you have and save up.

Simple? Maybe.

Best way to do it though.

Check out: http://www.daveramsey.com

[telfer12000]

Nearly all credit nowadays is either refused or granted using credit scoring rather than the old credit search approach which used to search only for previous incidences of failure to service debt e.g. CCJs, bankrupty, missed HP and/or mortgage payments etc

Most finance and credit companies have their own bespoke scoring card but the principles are fairly consistent across all companies. Their approach is simple, you will need X number of points in the scoring to get an approval for credit. Points are gained by the applicant exhibiting a history of maintaining payments on previous credit and points are also granted for the time the applicant has been resident at their current address and previous address and also the age of applicant plus many other factors including post code and other company specific measurements which might also include the absolute need to see the applicants name on the voters role. In other words if there is no evidence on file of the applicant at their given address(es) this will result, in most cases, in a decline of credit. Do not underestimate the importance of ‘checkable address(es)’ when it comes to credit.

There are many companies who will provide ‘sub-prime’ credit to applicants with previous money problems but no matter what Marketing splurge you might read about 'people who have had previous debt problems are better risks in the future', the credit company score cards will never ever reflect this and people who have had problems with money in the past will always have to pay over the odds to get credit in the short term future.

All the big credit providing companies tend to use Equifax or Experian to run their credit scores and credit checks and you might find it useful to pay the £8.25 to Experian for an online credit check to establish what information in actually held on record against your name. If your previous CCJ has been cleared you will possibly be able to have it removed from your recorded credit history.

[Allen]

Thanks. I did get my credit report from Equifax online and it did show a CCJ which was paid ages ago, but I thought you couldn't get this removed from your records for 6 years? Only other things on there where a few late payments and a few searches.

I have already applied for a credit card with Capital One and they refused. I don't really want credit at the moment, but I want to start rebuilding my credit history so I can apply for a mortgage in the future if I want to.

I've never seen anywhere to pay a deposit for a credit card, what companies offer that service? That sounds ideal!

And Coco, don't worry, I know I should really seek independant advise from those qualified to give it, but thought I'd ask around first to get some personal opinions.

[elglg]

If you do get a credit card to help imprive your credit score the try to keep it around the middle of the available balance, and use it every month. As when a company does a search and sees that you have a credit card with zero balance they see that they are unlikely to make any money out of you, as you will pay no interest, and if your card is maxed they you could be too high a risk. Also if you use your card every month and pay off more than the minimum payment then your current credit card company will see you are capable of using the credit sensibly and are likely to increase your limit, which may help to increase your credit score.

[Zak33]

go SEE your Bank...actually get an appointment....

tel them EXACTLY what you told us...

then get a £100 or £200 loan.....pay it monthly for 3 months....then pay it off...totally.

GO SEE THEM.....tell them WHAT you are doing...that you WANT a CREDIT SCORE AGAIN.....

Most managers WILL deal with it as a proper request....

[Allen]

Hmm.....

I think I'll give that a try! Would you have to do that a few times to better your rating then?