Resolved Question
Why has my credit score reduced in 12 months......?
even though I'm making BIG progress with my debts?
I've been on a debt management plan for 4 years, and this year I've managed to pay off 4 of my creditors, with only 4 months to go until I'm out of debt. I've kept to all the rules within the debt management plan and yet my credit score has reduced compared to this time last year. I don't understand why, if I'm playing by the rules.
Any advice please? Thanks
I've been on a debt management plan for 4 years, and this year I've managed to pay off 4 of my creditors, with only 4 months to go until I'm out of debt. I've kept to all the rules within the debt management plan and yet my credit score has reduced compared to this time last year. I don't understand why, if I'm playing by the rules.
Any advice please? Thanks
Additional Details
No, I'm not on an IVA, it's a DMP.
My payments to cccs are made on the 1st of every month by direct debit, and for the past 6 months I've been paying each creditor bar one more than what the original minimum repayment was.
My payments to cccs are made on the 1st of every month by direct debit, and for the past 6 months I've been paying each creditor bar one more than what the original minimum repayment was.
2 days ago
I've been keeping track of what each creditor is getting each month
2 days ago
Best Answer - Chosen by Asker
Are you closing lines of credit after you pay them off?
Here are a couple things that will RAISE your score, but tend to be forgotten when trying to get out of debt:
A line of credit that's NOT in use, such as a c/c with a high limit, but low balance
Age of a credit line, such as a c/c you've held for several years, a common thing you'll see on 800+ scores is c/c's or other open lines of credit that are 10 years old or older
In general, when your paying off debt, you always want to keep your oldest and also your largest lines of credit open (but balances low or paid off), both of these are big points to your overall score.
Do these items apply to you (did you close some old credit lines or high limit cards)?
Here are a couple things that will RAISE your score, but tend to be forgotten when trying to get out of debt:
A line of credit that's NOT in use, such as a c/c with a high limit, but low balance
Age of a credit line, such as a c/c you've held for several years, a common thing you'll see on 800+ scores is c/c's or other open lines of credit that are 10 years old or older
In general, when your paying off debt, you always want to keep your oldest and also your largest lines of credit open (but balances low or paid off), both of these are big points to your overall score.
Do these items apply to you (did you close some old credit lines or high limit cards)?
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Other Answers (2)
- 'Playing by the Rules' has very little to do with your Credit Score ..
The ONLY thing that counts, is, 'are you meeting the payments as originally contracted ?'
.. and, I would suggest, the answer is 'no' == you are (I suspect) making short payments as agreed perhaps under an IVA, however the payments are still SHORT ..
Also, you will typically be making one payment to the IVA 'practitioner' who then splits it up to pay the individual loans .. this can take some time and, if you paid the IVA at the end of each month, will result in your payments being marked 'late' ..
[each month, each loan reports to the Credit Ref. agencies ... the report can be 'paid (on time, in full)', 'late', 'short' or 'default (not paid)' .. if you miss a payment, typically they will report 3 months of 'late' before 'marking' your payments as 'default' .. if you go into an IVA, chances are, almost all your payments will be marked 'short' and a good few 'late' ..) - Probably you have some wrong items in your credit report. Use credit repair service to find and remove such bad stuff from your credit - credit-report-free.totalh.com
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