Settling my debts and improving credit score

Brighton_Grouch

Hi All,

I'm just gonna explain a little about my shameful credit history first off...

When I was a student I was a complete idiot and ran up about 20K of debt without being able to pay it back in the period between 2000 and 2004. Obviously my credit rating was shot to hell and when I started working I stopped paying any of it back and really burying my head in the sand.

In late 2005 I started making arrangements for an IVA and this was processed and agreed but I didn't sign the agreement and go through with it.

I have debts with about 10 different creditors, one being a 12K loan, about 6k on overdrafts and the rest on various smaller debts like credit cards etc.

I did have one CCJ for a small amount (£330) but have paid that in full. To my knowledge I don't have any others. I have applied for a credit report but it hasn't arrived.

As I said, I stupidly tried to walk away and hide from these creditors and I haven't been contacted by any of them in over 2 years.

Now I want to start paying back as I am moving in with my fiancee very soon and want to be in a position to get a joint mortgage in a couple of years.

My plan is to offer creditors partial repayment of my debts. My fiancee is happy to release some capital in her mortgage as she has a lot of equity so we can pay things off in the short term to benefit us in the long term.

I want to offer creditors 12K in total which is obviously 60% of the sum I owe, roughly. I would be offering it in full, upfront, no payment plans, just a one off lump sum. My questions are these....

1) Do people think that 12k on a 20K debt will be enough to satisfy these companies after not paying so long? Will they be willing to take such an amount if I pay it in a lump sum?

2) Frankly, I do earn enough that I have a couple of hundred I could throw at the problem every month but if I were to do this my debt would take years to pay off and I really want to improve my score now. I know it's a selfish way of looking at it but I really want to do what's best for my financial status at this point.

3) Assuming I pay them all off, will this immediately improve my credit score? I know the debts are listed as satisfied rather than settled. How much of a difference does this make to my credit record?

4) My credit rating is rock bottom at the moment. Assuming I'm successful in paying all these off, I want to be in a position to get a debit card ASAP and a mortgage within 2 years. (Or after the market calms down) Is this realistic?

Thanks in advance for all your help.

P

Brighton_Grouch

Sorry for the bump guys but I am really keen to get your advice, especially on how quickly I can improve my credit score using the method I'm going for.

Brighton_Grouch

I know this is another bump but I really am desperate for some advice and it seems to be happening in every thread apart from this one. Sorry to be a total and utter pain.

Waspeze

Just to give my take on it .. though i'm by no means an expert (I went the "other" route )

Brighton_Grouch wrote: »

Hi All,


1) Do people think that 12k on a 20K debt will be enough to satisfy these companies after not paying so long? Will they be willing to take such an amount if I pay it in a lump sum? I've seen people offer less and have it accepted .. if you don't try you won;t get, though make sure you stress it is a one off offer. There are some template letters around I think.

2) Frankly, I do earn enough that I have a couple of hundred I could throw at the problem every month but if I were to do this my debt would take years to pay off and I really want to improve my score now. I know it's a selfish way of looking at it but I really want to do what's best for my financial status at this point. If they refuse your offer you may have to go on a DMP where you'll be paying the excess.

3) Assuming I pay them all off, will this immediately improve my credit score? I know the debts are listed as satisfied rather than settled. How much of a difference does this make to my credit record?

4) My credit rating is rock bottom at the moment. Assuming I'm successful in paying all these off, I want to be in a position to get a debit card ASAP and a mortgage within 2 years. (Or after the market calms down) Is this realistic?
If you've defaulted and had a ccj then these will stay on your credit file for a while and will hinder you getting credit, no quick fixes i'm afraid.

Debit cards are available on some basic accounts though so just because you have bad credit doesn't necessarily mean you won't get one.

Thanks in advance for all your help.

P

HTH until someone more in the know comes along

RAS

Welcome

If these debts have not been paid in the last 6 years, they will be statute barred unless there is a CCJ outstanding.

Have you actually got your credit reports?

Which debts are still on it?

Brighton_Grouch

Thanks for the advice guys.

I haven't got my credit report yet as I don't want the collection companies knowing my current address until the money is in place to pay them.

The debts have been on there from between 2002 and 2004 with the CCJ going on in late 2005 but that was paid off last year.

When I went down the process with the IVA in 2006 I think this will count as acknowledgement of my debt.

Is their anyway of erasing a CCJ? It was the result of a dispute with my former work over holiday pay. If I had been in court I would have had (And still do have) all the evidence to squash their claim. But they were sneaky and sent all correspondance to an old address even though they had my current one until the CCJ came through after the court date, to the right address of course. I've paid it off, it was only for £240 and it has been lodged as paid on my credit report. Anyway off vamooshing it completely?