How do I get a clear credit history?greenspun.com : LUSENET : Repossession : One Thread
As a student I found it difficult to make regular payments to GE Capital for a Burton's store card. I was in arrears of something ridiculous like about #15. Anyway, they threatened me with debt collectors and so I paid them their bit of money and that was it. They let me keep my store card too! When I tried for credit a couple of months later I was refused, and so I got my credit record from Experian and GE Capitol was the lender that was stopping me getting credit. I still managed to get a loan from Barclay's bank for #10,000 cause I have been a good customer for some 10 years. I earn #18,000 a year and that was enough for the bank. What do I need to do to hace a clean credit history because I am thinking of taking out a mortgage in the next couple of months!
-- Clair Michelle Allen (firstname.lastname@example.org), June 12, 2000
Lending Criteria is a funny old game-you state that it was due to GE CApitol-what makes you so certain-yes perhaps there was a default reg against you by them-but as you state it did not stop you getting a loan from your own bank-who also lend for Mortgages. They have system of points add them up and if your left toe has a corn and your right one has two then you might fail-yet the person with 7 corns might pass.
Im sure many lenders reading this will jump up-but it just about sums it up. If you can get a 10K loan from your Bank and are in regular employment Then shop around-you should have no problem-if there is an amount owing and it is only small to GE Capitol -just pay it off and have ZERO Balance.
good mortgage hunting
-- charles twford (email@example.com), June 12, 2000.
The reason why you'll have been sent a letter threatening debt collectors from GE Capital for being in arrears by #15, is because of their methods of risk management. At the time you were a student, and to them that means you were a "high risk", nothing personal, just that their research shows that students often get into arrears or don't pay, people with a history of late or non payment would be considered high risk, or even those from a certain postcode area. So when you went into arrears, your "high risk" status generated a nasty letter. If at the time you had been in a different employment that was considered a "low risk", then your #15 arrears would have generated a letter saying something like "we're just reminding you you're late with your payment, please send it as soon as possible, we're awfully sorry to trouble you".
If you were in arrears because you had missed a month's payment, then this would show in your credit record as something like 000100000000 meaning that out of 12 months, in that 4th month you were late, you'll have seen this fully explained in the leaflet that Experian sent you.
As explained in the other answer, credit scoring is a strange game, and there is no hard and fast rule to say whether or not you will get granted credit. Depending on when the arrears happened to when you applied for new credit could have had a bearing on the decision if they were close together. For information, if it was another store card you applied for, GE Capital finance 90% of the storecards available, as well personal loans and mortgages through some companies, so they would check with their internal systems if you already had credit with them.
You'll probably find that when you apply for a mortgage, that missing a payment for a store card won't go against you, the lender will be interested in your payment history now and for the future now you're working, not when you were a student.
-- Pendle (firstname.lastname@example.org), June 12, 2000.