credit ratings

Former Member

how exactly do these work? i mean say i have my name down and have been paying for a service for a year .. that means i get good credit yes?

but then what if i fail to pay a bill for something else .. does than mean i lose any previous good credit or does it make it less good relative to how much i failed to pay etc if ya get me

Former Member

Its more complicated than that - because if you say hardly ever have credit for anything and when you do you pay it off in full on time every month - then you actually end up with a worse credit rating than if you default a bit on payments - or say on a credit card only pay of your interest each month. Because if your good then people dont' make any money out of you.

Obv if you constantly default on payments then your credit rating will be quite bad but there is usally someone willing to give you loan to bail you out at the end of the day.

Whilst if your good it might conversely be harder to get a loan for the same ammount....

Former Member

Wyetry wrote: »

Obv if you constantly default on payments then your credit rating will be quite bad but there is usally someone willing to give you loan to bail you out at the end of the day.
..

For a price!

Former Member

Basically your credit rating depends on a numberrrrr of things, also the thing about if youve never had credit it will be hard to improve it. Your best bet is if you can is to get a small limit credit card, spend £10/£20 a month on it and always pay in full. That will improve your credit rating no end.
Things that affect credit ratings - getting declined for any sort of credit such as overdrafts, loans and even contracts on mobile phones.
Also missing payments on any existing credit and going overdrawn, CCJS etc.
I wouldn't worry too much though as im 19 have never had credit in my life apart from a small overdraft and have companies here there and everywhere with offers of Credit cards and loans.

Former Member

The most important thing to remember is that there is no such thing as a credit rating. It's a myth, it simply does not exist.

Credit providers will view your credit history file with one of the three main credit reference agencies. They will use the information on the credit file, and they will use their own information on you, to decide whether they should lend you money.

Each credit provider will have different criteria and will make a decision based on whether you fit their criteria. Some lenders will only lend to those with an excellent repayment history; some lenders will never lend to those with an excellent repayment history.

As a general rule if your credit history shows that you have borrowed money and repaid it without problems then you will be a more appealing customer to most lenders. This is because your history shows that you are a safer risk. Those with no credit history will not be as appealing because they are an unknown quantity; those with a history of repeatedly missing payments will not be as appealing because they are a poor risk.

If you miss the occasional payment this will not affect your credit history file. The big things to avoid are County Court Judgments (CCJs) and default notices. A default notice is where a lender writes to you to tell you that your repayment record has been so bad you have broken the terms of the credit agreement.