I Have Bad Credit Score (I Think) Watch

The Empire Odyssey
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So I checked with an online credit score system and it showed I have very poor credit score rating. I am in the middle of looking at cars to finance but I am worried because of my apparent low/poor credit score rating (mid 300).

However, I'm really confused as I've never possessed (or applied for) a credit card, don't have a mortgage, I've never taken out a loan (apart from student loans but according to my sources, credit score checks do not include this because it's government money), I've never paid any monthly/mandatory bills like house utility, I've never had any outstanding payments, I've never had a phone bill, no fines, etc.

The only thing I can think is during 2014/15 academic year, I had a student overdraft (which was paid off and closed within the year). But I'm pretty sure this isn't part of a credit score. Might I add the overdraft was £1500, but only used £300 of it).

The only thing I pay for is my monthly car insurance and a new contract phone (which started in July 2019). But these shouldn't contribute to the low score, right?

So I'm dumfounded as to why my credit score rating is rated very poor. Can someone please clarify and reassure me that it will be fine to apply for car finance.
Last edited by The Empire Odyssey; 1 month ago
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999tigger
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#2
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(Original post by The Empire Odyssey)
So I checked with an online credit score system and it showed I have very poor credit score rating. I am in the middle of looking at cars to finance but I am worried because of my apparent low/poor credit score rating (mid 300).

However, I'm really confused as I've never possessed (or applied for) a credit card, don't have a mortgage, I've never taken out a loan (apart from student loans but according to my sources, credit score checks do not include this because it's government money), I've never paid any monthly/mandatory bills like house utility, I've never had any outstanding payments, I've never had a phone bill, no fines, etc.

The only thing I can think is during 2014/15 academic year, I had a student overdraft (which was paid off and closed within the year). But I'm pretty sure this isn't part of a credit score. Might I add the overdraft was £1500, but only used £300 of it).

The only thing I pay for is my monthly car insurance and a new contract phone (which started in July 2019). But these shouldn't contribute to the low score, right?

So I'm dumfounded as to why my credit score rating is rated very poor. Can someone please clarify and reassure me that it will be fine to apply for car finance.
https://www.moneysavingexpert.com/lo...-credit-score/

You increase it by getting on electoral register and then borrowing, paying back, borrowing again and paying back.

Probably low because they have no info on you.

https://www.creditkarma.co.uk/
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gjd800
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If you've had no debt before etc then it'll be low cos they don't know what kind of debtor you are
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alees1991
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A good credit score is anything over 700. Anything in between 300-850 is the most common credit score.

You can use these tips from CarMoney to help improve your credit score: https://www.carmoney.co.uk/blog/what...d-credit-score
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Reality Check
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(Original post by The Empire Odyssey)
So I checked with an online credit score system and it showed I have very poor credit score rating. I am in the middle of looking at cars to finance but I am worried because of my apparent low/poor credit score rating (mid 300).

However, I'm really confused as I've never possessed (or applied for) a credit card, don't have a mortgage, I've never taken out a loan (apart from student loans but according to my sources, credit score checks do not include this because it's government money), I've never paid any monthly/mandatory bills like house utility, I've never had any outstanding payments, I've never had a phone bill, no fines, etc.

The only thing I can think is during 2014/15 academic year, I had a student overdraft (which was paid off and closed within the year). But I'm pretty sure this isn't part of a credit score. Might I add the overdraft was £1500, but only used £300 of it).

The only thing I pay for is my monthly car insurance and a new contract phone (which started in July 2019). But these shouldn't contribute to the low score, right?

So I'm dumfounded as to why my credit score rating is rated very poor. Can someone please clarify and reassure me that it will be fine to apply for car finance.
You've answered your own question. The reason for the poor score is, indeed, the lack of credit which you've applied for! A 'thin' credit file which shows very few or no accounts being operated satisfactorily necessarily gets a poor score because there's nothing for lenders to go on.

If you want to improve it, first check the obvious things like checking for any errors, making sure you're on the electoral roll, making sure you don't have any financial connexions with people which you no longer have an association. Then, you need to open some easily obtainable credit accounts to show that you can handle them – think 'credit builder' credit cards (but always pay the balance off in full each month as the interest rates are horrendous), a mobile phone contract..that sort of thing. Only by opening credit agreements and using them responsibly will you be able to show to potential lenders that you are a safe bet.
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FutureFinance
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Hey,

If you're feeling really worried about your credit score you can always pop to your bank and chat with an advisor to see if they can offer you any help at all! In the meantime, these tips on how to keep a good credit score while at uni are worth keeping in mind! :bigsmile:

https://www.futurefinance.com/blog/5...e-as-a-student
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jackleo
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(Original post by The Empire Odyssey)
So I checked with an online credit score system and it showed I have very poor credit score rating. I am in the middle of looking at cars to finance but I am worried because of my apparent low/poor credit score rating (mid 300).

However, I'm really confused as I've never possessed (or applied for) a credit card, don't have a mortgage, I've never taken out a loan (apart from student loans but according to my sources, credit score checks do not include this because it's government money), I've never paid any monthly/mandatory bills like house utility, I've never had any outstanding payments, I've never had a phone bill, no fines, etc.

The only thing I can think is during 2014/15 academic year, I had a student overdraft (which was paid off and closed within the year). But I'm pretty sure this isn't part of a credit score. Might I add the overdraft was £1500, but only used £300 of it).

The only thing I pay for is my monthly car insurance and a new contract phone (which started in July 2019). But these shouldn't contribute to the low score, right?

So I'm dumfounded as to why my credit score rating is rated very poor. Can someone please clarify and reassure me that it will be fine to apply for car finance.
As per the 300-850 credit scale, 670-740 is a good credit score. If you maintain that score you can go through car finance/loan.
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J Zonda
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(Original post by The Empire Odyssey)
So I checked with an online credit score system and it showed I have very poor credit score rating. I am in the middle of looking at cars to finance but I am worried because of my apparent low/poor credit score rating (mid 300).

However, I'm really confused as I've never possessed (or applied for) a credit card, don't have a mortgage, I've never taken out a loan (apart from student loans but according to my sources, credit score checks do not include this because it's government money), I've never paid any monthly/mandatory bills like house utility, I've never had any outstanding payments, I've never had a phone bill, no fines, etc.

The only thing I can think is during 2014/15 academic year, I had a student overdraft (which was paid off and closed within the year). But I'm pretty sure this isn't part of a credit score. Might I add the overdraft was £1500, but only used £300 of it).

The only thing I pay for is my monthly car insurance and a new contract phone (which started in July 2019). But these shouldn't contribute to the low score, right?

So I'm dumfounded as to why my credit score rating is rated very poor. Can someone please clarify and reassure me that it will be fine to apply for car finance.
Maybe your credit history is too empty, i.e not enough addresses, no credit repayments, few direct debits. If you just establish yourself a bit more with your current address and bank account, keep paying off direct debits and get on the electoral register, eventually your score will grow. Might help to get a credit card and pay it off every month.
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The Empire Odyssey
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Thanks everyone! My car finance was accepted. Albeit, I'm paying 12.9% interest which is shocking.

But I'm happy with my car and maybe having this car finance will improve my credit rating??

Credit cars scare me! But I will go to my bank and have a chat with them. Thanks again.
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Reality Check
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(Original post by The Empire Odyssey)
Thanks everyone! My car finance was accepted. Albeit, I'm paying 12.9% interest which is shocking.

But I'm happy with my car and maybe having this car finance will improve my credit rating??

Credit cars scare me! But I will go to my bank and have a chat with them. Thanks again.
Glad to hear you got the finance sorted. Enjoy the car!
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martin7
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(Original post by The Empire Odyssey)
Thanks everyone! My car finance was accepted. Albeit, I'm paying 12.9% interest which is shocking.

But I'm happy with my car and maybe having this car finance will improve my credit rating??
Provided you make the required payments in full and on time, then this will improve your credit rating over time.
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Napp
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(Original post by martin7)
Provided you make the required payments in full and on time, then this will improve your credit rating over time.
The irony being lenders really dislike it when people do this as they dont get to reap the rewards of interest being charged against you.
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C.Goodyear
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(Original post by Napp)
The irony being lenders really dislike it when people do this as they dont get to reap the rewards of interest being charged against you.
Surely they don't want a risk of default? There is already 12.9% interest on the loan

I don't quite see the logic of financing a car anyway, why take money away from your future self?
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Reality Check
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(Original post by C.Goodyear)
I don't quite see the logic of financing a car anyway, why take money away from your future self?
You could extend that to a mortgage, or any form of borrowing.

The OP might well need a reliable car for work. It's thus a tool of production. Borrowing money to fund this is a wise move, from an economic point of view, if the alternative is some jalopy which would let him down and jeopardise his job.

Borrowing money for holidays, big televisions and weddings is less wise.
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C.Goodyear
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(Original post by Reality Check)
You could extend that to a mortgage, or any form of borrowing.

The OP might well need a reliable car for work. It's thus a tool of production. Borrowing money to fund this is a wise move, from an economic point of view, if the alternative is some jalopy which would let him down and jeopardise his job.

Borrowing money for holidays, big televisions and weddings is less wise.
In the old days when cars were less reliable it would be more true, but cars are so reliable nowadays that you can get a dependable one for just a couple of thousand. 12.9% just seems ridiculous me.
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Reality Check
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(Original post by C.Goodyear)
In the old days when cars were less reliable it would be more true, but cars are so reliable nowadays that you can get a dependable one for just a couple of thousand. 12.9% just seems ridiculous me.
I don't think he wants to be paying 12.9%... But in the end, it's up to the OP to make an economic decision as to whether or not this is the right thing for him.

One could say the only way to finance a car would be interest free, given that if you do it via a PCP you're essentially buying the depreciation. Paying interest on top of that could seem ludicrous to some.
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