Bank Charges (yep, that old chestnut again)

[Gavin Scott]

You are a fountain of knowledge, Gavin.

I wonder if I have a bad credit rating, or bad credit 'score' as you mentioned. About a month ago I applied for an All Saints credit card; I didn't even want to use it, I just wanted it in my wallet to look posh, but they told me my application had been declined (I also later learned that they're supposed to warn you that if it fails it will go against your credit rating - they didn't warn me of this, otherwise I'd never have signed up!)

I'm guessing that your credit history is based on how often you make payments into your credit cards and overdraft accounts? A month ago I had an overdraft of around £1000 and my credit card has at least £200 on it for the last two years - I always pay into it every month, but only cleared 100% of the balance last month; so I imagine I have a bad credit history, even though I've only had £1500 of loaned money, which I don't see as that much?

There's no such thing as a universal credit score/rating, per se. The information recorded is about the type and amount of credit offered, and your payment (or otherwise) history, and from that they can make decisions on whether to accept you as a customer.

Each lender or credit institution applies the information towards their own criteria of who is an acceptable customer to lend or give credit to. Surprisingly for most, they're not always seeking those with pristine records.

For example, some credit card companies may reject you for always repaying cards in full, because they won't necessarily realise a return on providing you this type of service.

In order to maximise the amount of credit you can get (as long as you take into account the potential pitfalls of this), you should first gain an understanding of what the banks know about you, can find out about you, and what they aren't interested in or have no access to.

Importantly, you can peruse your Experian credit file (the information made available to lenders) at any time. It costs a few quid, but searching for your own results will NOT leave a footprint on your record in the same way that a third party check will.

Have a read of this

http://www.moneysavingexpert.com/loans/ ... edit-score

and hopefully it will clarify some of what I've said.

[all new Phil]

I've got a near perfect credit score, despite the fact I've got a number of items of debt. The reason my credit score is so good is simply because I never miss a payment, and paying things off in full doesn't seem to mean too much to them.

Further to what Mr Cornwall said previously, making sure that any outgoings you have coincide roughly with the date you get paid will hopefully ensure that you never get into difficulties. Pay what you need to, then survive the rest of the month on what you have left.

[davidawinter]

http://www.freecreditreport.co.uk/edu/credit-score.aspx
This article says that credit to debt ratio is part of your credit score, so that seems to say if you pay off your debts all the way it would be better?