Credit rating taken a battery. How to repair?

mark87

My credit rating has taken a battering over the course of the last year and only now am I in a half decent position to start the repair work.

An overview of what has happened:

Lloyds Credit Card and overdraft were combined with a loan I was still repaying to Lloyds to £8,000. I am paying £130 a month for a term of 83 months!! I called Lloyds to get some help as I was struggling with the high credit card payments combined with the loan and other payments I was making elsewhere. I have been paying this for 12 months now. Credit card account was closed as was my overdraft facility for a year.

Virgin Credit Card account was closed after I missed a few payments and they have offered me a low rate of interest for 12 months to help get my finances in order which has been helpful. I only pay £25 a month to them now instead of the £50 previously due to my missed payments and costs for going over my credit limit.

Now I am in a decent position financially and have over £150 spare a month, after paying my debts, rent, etc and aim to open a savings account next month.

I actually applied for a small overdraft limit of £50 online with Lloyds but it was declined, a sign that my credit rating is really out of shape. I previously had a limit of £1000 with them (a year ago) before it was closed as part of the low interest loan they provided.

What steps should I now take to really help get my credit rating back on track?

I will not miss any more loan payments or credit card payments from now on.

Does opening a savings account help with my credit rating?

I know my finances were in a real mess but I am happy that I am now in a position to actually be able to put money away each month.

Also, I am on the voters roll and have a mobile phone bill (no missed payments on this).

Look forward to your thoughts, many thanks.

Mark:cool:

YorkshireBoy

mark87 wrote: »

What steps should I now take to really help get my credit rating back on track?

Time is the best healer. Just keep up repayments on your existing facilities, and manage your current accounts well, and your rating will improve.

Have you checked your credit reports to see exactly what's been recorded following your 'troubles'? If not I suggest that should be your next move.

Does opening a savings account help with my credit rating?

No.

...I am happy that I am now in a position to actually be able to put money away each month.

Whilst it's a good idea to have some rainy day funds, it makes sense to repay debt first before saving.

Paul_Herring

mark87 wrote: »

Now I am in a decent position financially and have over £150 spare a month, after paying my debts, rent, etc and aim to open a savings account next month.

I wouldn't bother with the savings just yet. Read http://www.moneysavingexpert.com/cards/pay-off-debts and http://www.whatsthecost.com/snowball.aspx

realaledrinker

Your chickens have obviously come home to roost!