Single missed payment has ruined credit. What can I do?
Discussion
Hi PH, just looking for some advice - I'll elaborate a bit more on the title of the post...
The basics are:
I'm 30 next month, I have a joint mortgage with my partner (not married) and aside from my mortgage, none of my 'expensive' items are financed. Cars are all owned outright, furniture all owned etc, car insurance and tax is always paid upfront etc - the only thing I do pay monthly for is my phone.
I have 2x credit cards, although 1 of these hasn't been used in probably 2 or more years. I have a relatively small mortgage due to a healthy deposit and depending on how much overtime I do each month, I typically put £850 to £1,500 aside each month for savings (which eventually fund new cars/holidays etc) - any other purchases (like a new TV) wouldn't come out of that money - I allow myself £200 a month of "fun" money, so if I did want something like a new TV, I'd save that "fun" money up for a few months to splurge on a TV etc. I've received several pay rises since having my mortgage approved and moving into my house, so my disposable income has increased, I have minimal monthly payments etc.
I had never missed a payment on anything in my life. In the build-up to buying my house and having the mortgage approved, we did an Experian credit score and mine was very good, a few points off the top mark if I remember correctly. I had a credit card with my bank with a £3,000 limit and another with Barclays with a £2,500 limit. I would sometimes put bigger purchases on them and then pay them off instantly to try and further improve my rating.
Moving into my house in October 2019, it was my girlfriend and my first home and we didn't have any idea how bills worked. Nobody explained anything to us so we just winged it, what could go wrong?
I had no idea, but where we live, clean water and wastewater are dealt with by separate companies. I had no idea this was a thing, nobody told us.
Whilst we set up our clean water direct debit from day one, we didn't with wastewater, we didn't know we needed to and just thought the water company we'd already signed up with would handle the lot.
During that first few months, with a lot of decorating, unpacking, and stuff going on - as well as being very busy with work, keeping on top of the post was not easy as silly as that sounds and some post was misplaced before being opened.
In June last year, I received a letter from a debt collecting agency regarding an unpaid water bill of a measly £60. The letter looked very fraudulent, littered with spelling mistakes and googling the company gave the impression that it was not genuine, besides, I was already paying my water bill and checked online and it was up to date.
A couple more of these very fake letters came in which I foolishly ignored and then I had another one threatening me with a CCJ if I didn't pay the outstanding bill. At this point, I wondered if maybe this was all legitimate, despite (to my knowledge) not receiving any bills from the other water company and only receiving badly spelt letters from a company that strongly appeared to be a scam. I called the other water company to find out what was going on. Low and behold, I finally found out that this company managed my wastewater and that was an actual thing. I apologised profusely and paid the stupid £60 bill on the spot and set up a direct debit to avoid it happening again.
Problem is, it was all too late. A couple of weeks later, I was contacted by my bank saying that my credit card limit was being reduced from £3,000 to £500. I then had Barclaycard reduce the other credit card limit from £2,500 to just £100. I rang them to query and they couldn't advise details but just explained it was due to something flagging up on my account but they couldn't see specific details - but given this is the only payment of any sort I've ever missed, it was obviously to do with this. Checking my credit score online, everything seemed to be good, it didn't even list the missed payment.
I called the water company back up and explained the situation to them and asked if the black mark on my credit score could be "erased" and went back and forth with various members of the team about it, they all seemed to believe what happened and apologised, however, they could only revoke the black mark if it was because of fraud and the fact that I didn't pay the bill and openly admitted that, despite it being a mistake, meant that legally they could not revoke the mark.
This was all back in October. I figured my credit cards limits being dropped was a knee-jerk reaction from Halifax and Barclaycard and given my good credit aside from this one instance, within a short time it would be back to normal again.
We're 10 months on now and I am in the process of booking a holiday for May next year, given the situation with flights right now, I was hoping to book on my credit cards so I have some sort of protection. Additionally, a lot of hotels and car rental places in the USA, where I plan to go, don't accept debit cards and require a credit card (not a debit card) for a security deposit.
I tried to increase my credit limit for my own bank account and Halifax immediately declined the request, so my credit is still screwed from this whole ordeal. Even though this holiday is still a year off, I'm really worried about turning up and being declined my rental car or hotel rooms because I'm unable to provide a valid credit card and the debit card I take with me ends up being declined.
I know several people who are in a lot of debt, have maxed out £5,000 credit cards and then gone and got another £5,000 card, or people who've gone to court for not paying their bills, yet financed a £30,000 car etc so I don't really understand how one small blemish of £60 has tanked my rating so much.
Is there anything I can do about this or is it really a case of tough luck? Is there any way I can reverse this or do anything to quickly sort out and fix the blemish on my record?
How would I go about getting a higher limit ready for this holiday next May?
I am constantly kicking myself over this but the honest truth is you'd have thought those letters were spam too!
Cheers PH.
The basics are:
I'm 30 next month, I have a joint mortgage with my partner (not married) and aside from my mortgage, none of my 'expensive' items are financed. Cars are all owned outright, furniture all owned etc, car insurance and tax is always paid upfront etc - the only thing I do pay monthly for is my phone.
I have 2x credit cards, although 1 of these hasn't been used in probably 2 or more years. I have a relatively small mortgage due to a healthy deposit and depending on how much overtime I do each month, I typically put £850 to £1,500 aside each month for savings (which eventually fund new cars/holidays etc) - any other purchases (like a new TV) wouldn't come out of that money - I allow myself £200 a month of "fun" money, so if I did want something like a new TV, I'd save that "fun" money up for a few months to splurge on a TV etc. I've received several pay rises since having my mortgage approved and moving into my house, so my disposable income has increased, I have minimal monthly payments etc.
I had never missed a payment on anything in my life. In the build-up to buying my house and having the mortgage approved, we did an Experian credit score and mine was very good, a few points off the top mark if I remember correctly. I had a credit card with my bank with a £3,000 limit and another with Barclays with a £2,500 limit. I would sometimes put bigger purchases on them and then pay them off instantly to try and further improve my rating.
Moving into my house in October 2019, it was my girlfriend and my first home and we didn't have any idea how bills worked. Nobody explained anything to us so we just winged it, what could go wrong?
I had no idea, but where we live, clean water and wastewater are dealt with by separate companies. I had no idea this was a thing, nobody told us.
Whilst we set up our clean water direct debit from day one, we didn't with wastewater, we didn't know we needed to and just thought the water company we'd already signed up with would handle the lot.
During that first few months, with a lot of decorating, unpacking, and stuff going on - as well as being very busy with work, keeping on top of the post was not easy as silly as that sounds and some post was misplaced before being opened.
In June last year, I received a letter from a debt collecting agency regarding an unpaid water bill of a measly £60. The letter looked very fraudulent, littered with spelling mistakes and googling the company gave the impression that it was not genuine, besides, I was already paying my water bill and checked online and it was up to date.
A couple more of these very fake letters came in which I foolishly ignored and then I had another one threatening me with a CCJ if I didn't pay the outstanding bill. At this point, I wondered if maybe this was all legitimate, despite (to my knowledge) not receiving any bills from the other water company and only receiving badly spelt letters from a company that strongly appeared to be a scam. I called the other water company to find out what was going on. Low and behold, I finally found out that this company managed my wastewater and that was an actual thing. I apologised profusely and paid the stupid £60 bill on the spot and set up a direct debit to avoid it happening again.
Problem is, it was all too late. A couple of weeks later, I was contacted by my bank saying that my credit card limit was being reduced from £3,000 to £500. I then had Barclaycard reduce the other credit card limit from £2,500 to just £100. I rang them to query and they couldn't advise details but just explained it was due to something flagging up on my account but they couldn't see specific details - but given this is the only payment of any sort I've ever missed, it was obviously to do with this. Checking my credit score online, everything seemed to be good, it didn't even list the missed payment.
I called the water company back up and explained the situation to them and asked if the black mark on my credit score could be "erased" and went back and forth with various members of the team about it, they all seemed to believe what happened and apologised, however, they could only revoke the black mark if it was because of fraud and the fact that I didn't pay the bill and openly admitted that, despite it being a mistake, meant that legally they could not revoke the mark.
This was all back in October. I figured my credit cards limits being dropped was a knee-jerk reaction from Halifax and Barclaycard and given my good credit aside from this one instance, within a short time it would be back to normal again.
We're 10 months on now and I am in the process of booking a holiday for May next year, given the situation with flights right now, I was hoping to book on my credit cards so I have some sort of protection. Additionally, a lot of hotels and car rental places in the USA, where I plan to go, don't accept debit cards and require a credit card (not a debit card) for a security deposit.
I tried to increase my credit limit for my own bank account and Halifax immediately declined the request, so my credit is still screwed from this whole ordeal. Even though this holiday is still a year off, I'm really worried about turning up and being declined my rental car or hotel rooms because I'm unable to provide a valid credit card and the debit card I take with me ends up being declined.
I know several people who are in a lot of debt, have maxed out £5,000 credit cards and then gone and got another £5,000 card, or people who've gone to court for not paying their bills, yet financed a £30,000 car etc so I don't really understand how one small blemish of £60 has tanked my rating so much.
Is there anything I can do about this or is it really a case of tough luck? Is there any way I can reverse this or do anything to quickly sort out and fix the blemish on my record?
How would I go about getting a higher limit ready for this holiday next May?
I am constantly kicking myself over this but the honest truth is you'd have thought those letters were spam too!
Cheers PH.
Sorry for your plight. As you've found out, there's not much you can do about the black mark.
I can only suggest that you try a soft credit card eligibility search to see if you can get another credit card, hopefully with a decent credit limit. Also, suggest you try for the "good" (i.e. fee free) travel credit cards e.g. Halifax Clarity.
All the best....
I can only suggest that you try a soft credit card eligibility search to see if you can get another credit card, hopefully with a decent credit limit. Also, suggest you try for the "good" (i.e. fee free) travel credit cards e.g. Halifax Clarity.
All the best....
For your trip, why not persuade your other half to set you up with a second card on their account?
Going forward make sure you don't leave your own credit card(s) idle. Us it/them instead of your debit card and just pay them down at the end of each month. It's a very effective way of getting the system on your side.
Going forward make sure you don't leave your own credit card(s) idle. Us it/them instead of your debit card and just pay them down at the end of each month. It's a very effective way of getting the system on your side.
Sorry to say it but it sounds like a painful situation. Use the £500 credit card as much as you can each month and set it up to be paid off automatically each month by direct debit to evidence that you can borrow and pay that back...
On the plus side, at least it's after you've bought a house rather than just before.
On the plus side, at least it's after you've bought a house rather than just before.
JP__FOX said:
Sorry to say it but it sounds like a painful situation. Use the £500 credit card as much as you can each month and set it up to be paid off automatically each month by direct debit to evidence that you can borrow and pay that back...
On the plus side, at least it's after you've bought a house rather than just before.
This is not good advice. On the plus side, at least it's after you've bought a house rather than just before.
One of the largest constituents of your credit score is credit utilisation. If you are maxing your card(s) every month, you have 100% credit utilisation which shows to lenders you really need the money.
Ideally, you should keep your utilisation at 30% or below to show you can responsibly use credit (of course in conjunction with paying it back on time). I read some tips on this blog post: https://www.getapricot.co.uk/blog/5tipscreditutili...
There are tonnes of "bad credit" credit cards who might accept you, but they will very likely start with small limits. The good news is that so long as you don't make any other mistakes, a late or missed payment is the least severe of bad credit markers and its impact will ease with time.
Also note your credit score is not actually what lenders use to assess you - it's just the bureau's interpretation of your creditworthiness. Having a conversation with lenders you are interested in signing up with prior to applying is a good idea (if possible), as multiple credit applications will also damage your credit history.
Also:
- I don't think you mentioned whether you actually repaid the water company. Did you do that? Have you made sure they have reported the repayment to the credit bureaus?
- You mentioned the missed payment is not on your credit report. Make sure you check with all three of the big ones - Experian, Equifax and TransUnion - as not all companies report to all credit bureaus. FYI, Clearscore uses Equifax and Credit Karma uses TransUnion
Good luck!
- I don't think you mentioned whether you actually repaid the water company. Did you do that? Have you made sure they have reported the repayment to the credit bureaus?
- You mentioned the missed payment is not on your credit report. Make sure you check with all three of the big ones - Experian, Equifax and TransUnion - as not all companies report to all credit bureaus. FYI, Clearscore uses Equifax and Credit Karma uses TransUnion
Good luck!
I know it's not easy these days but have you tried talking to an actual human? I can't quite work it out but is it Halifax you bank with and have a creditcard with. Explain the above and the concern re holiday bookings etc see if it makes any difference. Calmly explain the situation including the modest increase you are looking to have by May and how you can get it. Point out your account balances if they are always running at 'x' level in the black.
Perhaps the computer says no line will be trotted out but you never know. Just shows how easy they can rug pull you and how impersonal/automatically it is done! If they seem unhelpful then at least you know to look elsewhere.
If the holiday is in May then this gives you time, perhaps monitor your credit score (experian?) these next few months as you use the creditcards as suggested and routinely pay them off and then when improved consider setting up a new current account or switch (switch to Nationwide and they'll pay you up to £125 and if your current bank has been unhelpful I'd be tempted to do it anyway). Redirect your salary there (if you don't switch) and set up a DD from your now old current account to cover all regular payments.
You've been bundled into the possible bad debt category through this one oversight, so you either fight your corner given your circumstances or try a clean slate elsewhere.
Perhaps the computer says no line will be trotted out but you never know. Just shows how easy they can rug pull you and how impersonal/automatically it is done! If they seem unhelpful then at least you know to look elsewhere.
If the holiday is in May then this gives you time, perhaps monitor your credit score (experian?) these next few months as you use the creditcards as suggested and routinely pay them off and then when improved consider setting up a new current account or switch (switch to Nationwide and they'll pay you up to £125 and if your current bank has been unhelpful I'd be tempted to do it anyway). Redirect your salary there (if you don't switch) and set up a DD from your now old current account to cover all regular payments.
You've been bundled into the possible bad debt category through this one oversight, so you either fight your corner given your circumstances or try a clean slate elsewhere.
22s said:
JP__FOX said:
Sorry to say it but it sounds like a painful situation. Use the £500 credit card as much as you can each month and set it up to be paid off automatically each month by direct debit to evidence that you can borrow and pay that back...
On the plus side, at least it's after you've bought a house rather than just before.
This is not good advice. On the plus side, at least it's after you've bought a house rather than just before.
One of the largest constituents of your credit score is credit utilisation. If you are maxing your card(s) every month, you have 100% credit utilisation which shows to lenders you really need the money.
Ideally, you should keep your utilisation at 30% or below to show you can responsibly use credit (of course in conjunction with paying it back on time). I read some tips on this blog post: https://www.getapricot.co.uk/blog/5tipscreditutili...
Thanks all for the replies. To clarify, I did pay immediately upon realising it was a genuine bill.
The water company said that they could not overturn the blemish on the account as I still did not pay for x amount of time.
On my credit report, it shows 3 missed payments, because it went on for 3 months.
I have signed up to ClearScore today and my score is showing as around 650/1000.
I do not know if the scoring system on Experian is different but a few weeks after this all happened, my score was still showing as 997/1000.
If the scores are the same/similar, it has dropped massively.
I checked the credit card finder that ClearScore does and a dozen came up with pre-approval and credit limit upon application, however, the top result was for Halifax, who literally declined a raised limit on my card last weekend, so I am very sceptical about going to get another credit card from them to have it declined and it have further implications on my score.
I have put a dispute across to ClearScore explaining it all, maybe they can do something about it?
At least I have 10 months to resolve the problem.
I had to book the flights there and then, so paid outright with my debit card. The rental car I've opted to pay on arrival, it was £80 more expensive but gives me that time to sort the credit card situation out, rather than risk using my debit card to pay now and then be declined the rental on arrival because I can't supply a credit card etc.
It's a 4,000 mile road trip over 19 days with 18 different hotels. They will all have security deposits, probably of £200 or so, different hotel each night means I'll probably need a decent limit to cover those deposits? The rental car takes about £1000 if I remember correctly?
I hope I get this sorted.
The water company said that they could not overturn the blemish on the account as I still did not pay for x amount of time.
On my credit report, it shows 3 missed payments, because it went on for 3 months.
I have signed up to ClearScore today and my score is showing as around 650/1000.
I do not know if the scoring system on Experian is different but a few weeks after this all happened, my score was still showing as 997/1000.
If the scores are the same/similar, it has dropped massively.
I checked the credit card finder that ClearScore does and a dozen came up with pre-approval and credit limit upon application, however, the top result was for Halifax, who literally declined a raised limit on my card last weekend, so I am very sceptical about going to get another credit card from them to have it declined and it have further implications on my score.
I have put a dispute across to ClearScore explaining it all, maybe they can do something about it?
At least I have 10 months to resolve the problem.
I had to book the flights there and then, so paid outright with my debit card. The rental car I've opted to pay on arrival, it was £80 more expensive but gives me that time to sort the credit card situation out, rather than risk using my debit card to pay now and then be declined the rental on arrival because I can't supply a credit card etc.
It's a 4,000 mile road trip over 19 days with 18 different hotels. They will all have security deposits, probably of £200 or so, different hotel each night means I'll probably need a decent limit to cover those deposits? The rental car takes about £1000 if I remember correctly?
I hope I get this sorted.
Insurancejon said:
Can you still over pay credit cards?
If so would a monthly overpayment that you let accrue cover the trip?
I actually tried to pay £5,000 onto my Mastercard (that had about £15 outstanding on it) to go massively in-credit thinking that would be a solution, so I could book flights and the car, however, it wouldn't let me pay in any more than the outstanding balance. If so would a monthly overpayment that you let accrue cover the trip?
I had similar. One missed mortgage payment due to a break up and separating of our joint account and with one thing and another not leaving enough cash in the account.
Everything else perfect but it battered my credit rating and made getting my next mortgage I right ballache.
It's been nearly 7 years now so I'm hoping it'll improve soon because it's barely improved since then.
Luckily I don't need any credit but it's nice to know the option is there.
Everything else perfect but it battered my credit rating and made getting my next mortgage I right ballache.
It's been nearly 7 years now so I'm hoping it'll improve soon because it's barely improved since then.
Luckily I don't need any credit but it's nice to know the option is there.
Not every hotel will hold money on your card, a lot just want the card details on record.
I wouldn't worry about the trip. Worst case if things don't improve, you use debit cards where possible and can pay the credit card balance off on the app every few days to bring your available balance back up.
If the girlfriends credit hasn't taken the same impact, I'd discuss the idea of her getting a credit card out as well as a back up. You can then either get an additional card on her account (no credit check on you) or just use hers for the trip if needed.
I wouldn't worry about the trip. Worst case if things don't improve, you use debit cards where possible and can pay the credit card balance off on the app every few days to bring your available balance back up.
If the girlfriends credit hasn't taken the same impact, I'd discuss the idea of her getting a credit card out as well as a back up. You can then either get an additional card on her account (no credit check on you) or just use hers for the trip if needed.
OP, if you didn't receive any bills as you say then you could've contested the debt and possibly had the default overturned.
However (and IANAL), I think by settling the £60 you have in effect accepted the debt as legitimate and won't have grounds to challenge it now.
Others have given useful advice about rebuilding creditworthiness. Defaults fall off your credit file 6 years after being settled.
However (and IANAL), I think by settling the £60 you have in effect accepted the debt as legitimate and won't have grounds to challenge it now.
Others have given useful advice about rebuilding creditworthiness. Defaults fall off your credit file 6 years after being settled.
Off Topic A Bit - A bad credit rating does pass with time. In my insolvency I went down for £138,000. My creditors had to settle for 16p in the pound. I couldn't have borrowed money if I'd wanted to, which I didn't. NatWest - with whom I had never banked - permitted me a Step Account (for students and bankrupts the person I dealt with explained). The years passed. I was a good boy and paid my bills on time. For a laugh I checked my credit rating. 999. Ridiculous really.
Sorry for the hi-jack, but I just checked my credit score with TransUnion, which is a free service I get with my Halifax banking. The score is good, but it says "Your credit limit is quite low. This means that lenders may see you as a higher risk".
I assume it's referring to my credit card limit? My card limit is £3500, which was increased in December from £2500 (Halifax just did it, I didn't ask). Checking my last six months statements, I use it for £250 to £750 or so per month.
Should I ask Halifax to increase the limit? How much should I ask for? I need to remortgage in six months, so I want the rating to be as good as it can be, but if I ask for too much credit and it is declined, then it might negatively affect my score.
I assume it's referring to my credit card limit? My card limit is £3500, which was increased in December from £2500 (Halifax just did it, I didn't ask). Checking my last six months statements, I use it for £250 to £750 or so per month.
Should I ask Halifax to increase the limit? How much should I ask for? I need to remortgage in six months, so I want the rating to be as good as it can be, but if I ask for too much credit and it is declined, then it might negatively affect my score.
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