I have a default on a credit card from 2010. This was due to disappear from my report sometime this year, but debt has been passed on to a new company who are now reporting on my file and threatening a new default for the same debt. Can this be true?
I understand your concern. The new company can register a default under their name but, importantly, the amount and date must be the same as the original entry. And the original entry should be updated with a marker to make it clear the debt has been sold on, so that anyone looking at your credit history in the meantime isn’t misled into thinking there were two separate debts. I suggest you keep an eye on your credit report and, if the second company does register a new default with a new date, let us know so we can dispute this for you. You can find a step-by-step guide of how to tell us if an entry on your credit report is wrong and what’s wrong with it in this previous Ask James answer. (February 2016)
You can find archived Ask James questions arranged under subject headings such as ‘applying for credit’, ‘credit and debt’ and ‘fraud’ at the main Ask James page.
Your credit score is often seen as the key that could unlock access to better credit deals, mortgage approvals & more. But who decides your credit score? And what are the factors that most affect it?
When you make an application for a loan, credit card, mortgage or other type of credit (such as a new utility contract or mobile-phone account), lenders look at your credit report to work out a credit score for you. They do this so they can judge for themselves if they think you’ll be a responsible borrower and likely to repay what you owe them.
There is no ‘one’ universal credit score. Different lenders can score differently, using their own formulae based on their own factors – there really is no ‘magic number’.
The Experian Credit Score is a guide to help you understand your credit report, and how the way you’ve managed the credit you’ve had in the past might affect applications you’re making now, and can give you an indication of what kind of loan you might get. Usually, a higher score means you’re seen as lower risk – meaning you’re more likely to get credit, and at better rates.
Your Experian Credit Score is not set in stone – it’s a living, breathing thing and it changes along with your own financial behaviour. Getting your credit score up could open up the potential chance to get better loans – and at better rates.
Do try to stay within your credit limits and do try to pay your credit bills on time. Missed or late payments stay on your credit report for at least six years, and this can have a big impact on your score.
Credit scoring can also look at the average age of your accounts, so try not to chop and change all of your accounts on a regular basis.
Review your credit report regularly: make sure it’s up to date, and that the information on it is accurate. If you do find anything that needs correcting, contact the relevant lender and ask for an amendment – Experian can also raise a dispute on your behalf. Even small details like the way your name and address is recorded could have a significant impact.
Don’t resort to a scattergun approach to credit applications, as each application is recorded on your credit report and if lenders see lots in a short period, they could think that you’re desperate or suspect a fraud.
Make sure you register to vote at your current address, as lenders use the electoral register to help confirm who you are and where you live.
You can also send in general credit or ID Fraud questions to James Jones, our Head of Consumer Affairs, who regularly answers queries on his popular Ask James column – a selection of which we regularly feature in this blog.
Last night (16 March), Experian’s James Jones and Jill O’Connor appeared on LBC’s Money Hour show answering listeners’ queries about credit scores and credit ratings.
It’s a living thing
Your credit score is not set in stone – it’s a living, breathing thing. Your own credit rating changes along with your own financial behaviour.
When you make an application for a loan, credit card, mortgage or other type of credit (such as a new utility contract or mobile-phone account), lenders look at your credit report to work out your credit score. Why do they do this? So they can judge for themselves if they think you’ll be a responsible borrower and likely to repay what you owe them. Continue reading →
In the second of our series of Credit Café videos, our Experian Experts James Jones and Joanne Leahy explain how a credit score is calculated.
This video is part of the ‘Demystifying Credit’ series that we’re posting on YouTube every Friday for the rest of January. Look out for the next one coming soon on our YouTube channel. You can watch the first Credit Café video about who decides if you get approved for credit here.
In the first of a regular video series that we’ll be hosting on our YouTube channel - the Credit Café - Experian Experts James Jones and Joanne Leahy explain who decides if you get approved for credit.
This video is one of four short episodes in the ‘Demystifying Credit’ series that we’ll be posting on YouTube, every Friday for the rest of January. Look out for the next one coming soon on our YouTube channel.
Wonga has recently announced it is cancelling loans owed by a number of customers following a review of its lending criteria. Can you tell me what will happen to these people’s credit reports and when, and how this will affect their future credit ratings? Thanks.
My partner has a poor credit score due to falling behind on credit card payments when he was out of a job and the account had defaulted. We are currently trying to find a mortgage but because of this we cannot seem to get one. Would paying the remainder of the account in full help with his credit and possibly be accepted for a mortgage?
On my report my HSBC account is defaulted and this is incorrect – what should I do? It should be changed to ‘satisfied’. I believe this information is preventing me from opening a bank account anywhere.