How long to go from rubbish credit to decent?

iwanttohavesomemoney

Hello everyone, first post here so virtual drinks on me!

My question is this; I used to have loads of debts, moved around a bit falling for the 'it'll be alright in the end, I'll be able to pay it off' trap. I then re-trained and my income raised from £11-£15k on agency with all the insecurities that raises to approx £28k on a full time job that seems pretty secure even in these troubled times.
I 'gained' some defaults, but these are mostly 'satisfied' on my credit file though it is annoying to see the DEFAULT in big red writing. My debt has reduced from about £12k or so to about £4k.
However, my fixed rate near-prime mortgage interest only went from £700pcm to £1080pcm, now reduced to £1008pcm due to interest rate cuts. I owe about £138k on the mortgage so I think my repayments, although affordable are extortionate. I know its due to my past, and I know lenders are nervy atm. But, in my logic then if I can show I can pay £1008pcm then a decent rate should be no problem; but when do banks show logic?! Oh and pay off the old debts on top of this mortgage AND a car loan with Welcome, and help with the lovely Family!

So when can I expect to be able to be offered a regular mortgage? I expect to be debt free (exl mortgage and student loan) in the next 10-12 months.

bathgatebuyer

My own (sub-prime) mortgage is with GMAC which ends in march 2009 at a rate of 6.56%. That was at a time when my credit rating was deemed 'very poor' on the Equifax score. Although that mortgage was taken out in 2007 and it's a different market since then, the difference between 'prime' and 'sub-prime' was about 1% according to the broker I used. I'll be looking to renegotiate nearer the time and would hope to be back in the 'mainstream' shortly, but I can't say having been sub-prime has been awful. It has, however, allowed me to select a mortgage which suited me at the time (coming out of unemployment into a relatively secure new job at the time the previous mortgage which had late payments shortly before the move from fixed rate to variable due to the unemployment).

A default remains on your file for 6 years, but I would speak to a fee-free broker for some advice.

iwanttohavesomemoney

thats interesting that its so close, 1% seems hardly anything does it?

Another question I have, is this;

I have just under 2 years left on Welcome Finance, which I haven't missed a payment for in 2 years; but obviously its an interest paying account. I'm also paying back a loan and credit card via credit agencies with defaults. As I said, I can pay them back within about a year; but should I concentrate on paying back the defaults first then the car, or the other way round?

chunkytfg

iwanttohavesomemoney wrote: »

thats interesting that its so close, 1% seems hardly anything does it?

Another question I have, is this;

I have just under 2 years left on Welcome Finance, which I haven't missed a payment for in 2 years; but obviously its an interest paying account. I'm also paying back a loan and credit card via credit agencies with defaults. As I said, I can pay them back within about a year; but should I concentrate on paying back the defaults first then the car, or the other way round?

Highest interest rate first as a general rule.

Look to see if you are allowed to make overpayment on the car loan though.

I've a loan with nationwide(personal loan not secured on anything) and they only allow an overpayment of an extra £100 reagrdless of the repayments allready made! Bit of a !!!!!! really but for the time being it's the credit cards that have to go first.