How does the credit default affect a graduate job?

Declined...low credit rating...but accepted for huge student overdraft! CONFUSED?

• I'm a 3rd year undergraduate student at uni. In 2007 I opened a student account with natwest and was given a overdraft of £1250 for my first year and over the years upgraded it therefore my current overdraft is £1450. When i finished my A levels I took a gap year to go traveling (australia, china, brazil, italy etc). However now looking back, i see how immature i was on making late payments on the credit cards I had at the time. Long story short: In the past (between the age of 18-19) i must admit i was not good with managing money and had no idea how late payments would affect my credit score etc. We all learn from our mistakes, and i have definitely learned from mine. I tend to check my credit file/credit rating with equifax every 2-3 months and even though all my payments are up to date (fone contract, car insurance, car finance, credit card) my credit score is STILL very poor after all this years. I have a part time job and i manage to get £700-800 each month, my student account is up to date and i tried applying for a small loan with natwest of £1000 (which i so could afford to pay back) and once again i am declined (i must have applied twice in the last 10 months), I am aware my credit rating is low hence why i have been declined, but how come i am never declined for the overdraft which is now £1450 ??? I am due to graduate in 8 months and obviously in the next 2 years i would like to buy a house, but i am aware it will be extremely difficult to get a mortgage, or even car finance (i only managed to get finance on my current car as i went to a dealer in chertsey called 'yes u can' saw advert on tv and they accept everyone but the catch is the APR is too high). I feel so frustrated at times, as i have NO ccj's, defaults, the only thing i had was late payments a few years back, but clearly can they not see the improvement?? If you can provide any type of suggestions to improve my situation , i will be very grateful. Many thanks

• Answer:

  Are you on the electoral register? That helps raise your credit score. Applying for credit card or loan multiple times is not a good indicator to creditors - if you've applied more than once in the last six months, they take it that you were declined by others, so you're more likely to be turned down by a new creditor. Leave it at least 6 months before re-applying. You can also add a 200 word statement to your credit report as a message to explain what happened whilst on gap year. Also student overdrafts are given with little or no credit checking, and are different to loans, as there's no set monthly re-payment plan to stick to, so it doesn't surprise me you got an overdraft no problem. There are such things as 'Graduate Loans' which would be worth looking into once you've finished uni. I would like to buy a house too! But beggars can't be chosers.... you're better off paying off any debts you have before you start saving for deposit - the housing market will change whilst you're busy saving, and you will probably find conditions are more preferable by the time you're ready to buy. All the best with your degree.