Bad Credit

[Anonymous]

I have recently made a new handset contract with o2, I asked to O2 phone shop manager about my credit. If it is effecting to my credit score I dont, otherwise I will go ahead, he said it does not impact my credit score. I am applying for mortgage, if my credit score is turning down because of opening new credit account with O2. I won't be able to get the mortgage, I explained to shop manager about the importance of my credit.

He convinced me, it does not make any impact. 

I upgraded new contract with O2 though my contract was with EE.

I found my credit report very bad because of O2, cheked Experian credit report, there are 2 negative reports, one is opening new credit account with O2 and other one is Loan £460 with O2. My credit score is gone down from excellent to fair because od O2. I paid £460 lump sum to O2, it is still showing in my credit report that I owe £460 to O2. I contacted to Experian about this matter, they said to contact O2.

My mortgage advisor advised me not to apply for mortgage now which can be declined because of bad credit score.I lost my property, because of delaying to apply for mortgage.

O2 is a reputed company, I,m your loyal customer, and very very disappointed at this time.

[jonsie · Accepted solution]

Taking out any form of contact with anyone will have an impact on credit scoring.  The more credit searches done, the greater the impact.

The only way to improve it now,  apart from waiting and making regular payments,  is to pay off the handset part of the contract (presumably the £460 paid covers it) and giving 30 days notice to end the contract.

The debt will then show as settled on your file. Get the phone unlocked and use a P&G sim until you have your mortgage settled. Seems anything to make a sale.....

[MI5]

Having credit and making regular payments will improve your credit score.
It's when you fall behind with payments that credit is effected.

[perksie]

An O2 store manager isn't qualified to give advice about your credit rating, as far as he's concerned you have either passed or failed.

Any effect on your credit will be restored after a few months of regular payments.

More about how credit ratings work: http://www.moneysavingexpert.com/loans/credit-rating-credit-score

[PhoneChanger]

O2 will not have effected your credit score in itself, what the banks look for when issuing a mortgage is (1) your payment history on the credit you have (2) whether you have any missed payments, etc and (3) how much "credit" is available to you.

The main reason your credit may have gone from very good to fair will be because you have a lot of open credit accounts (whether or not anything is owed on these is irrelevant), when applying for a mortgage it is always recommended to close any open and unused credit accounts.