Credit rating/ score repair help needed

hardcore_since84

Hi, how’s it going?
I have a question regarding Credit Rating/ Score repair that I would really appreciate your help with.
Just over a year ago now I became disheartened and decided to leave my (£25k per annum) full time job in surveying to pursue a full time degree in my passion: Business management and Entrepreneurship. Everything went well with the transition into academics (although I am now a broke student); my other half has been very, very supportive financially, I got the maximum student loan I could and I also got a part time job without too much trouble.
However I still have the responsibility to repay:
Natwest personal loan (£12k)
Natwest overdraft (£1200)
HSBC overdraft (£450)
Alliance & Leicester overdraft (£1300)
I then contacted the Consumer Credit Counselling service whom advised me to make offers of minimum payments to my creditors.
All of my debts were then eventually passed on to collection agencies
Fortunately for me all of the collection agencies have been very reasonable and accepted offers of (£1) minimum payments and I have been paying them every month for the last year. FYI Natwest’s collection agency has made me an offer to clear my £12k personal loan debt with a payment of just £7,000! Which if I was in the position to– I would happily take them up on the offer.
As a result of the minimum payments I believe that my credit score and rating is dire and at the age of 25 it won’t be long till I start thinking about things like buying a house or getting car finance etc.
So I’d really appreciate your practical advice on…

• How I can improve my credit rating and score?
• Do I have to pay the total balance of my debts to improve my credit rating?
• Would you advise paying off my total debts before starting a business (even though I am currently paying under £20pcm to service my debts)?

Thanks, and I look forward to your responses

agroves06

am in the same sort of sitution but I owe £5000 so would love to see what people say on this?

GeorgeUK

Until you pay off the debts (or get full and final settlements for them - not partial ones), it would probably be about 2 years after this that your credit rating was back to normal. You need to make sure that you are lsited on the electoral roll, but other than that it is a case of making sure that all payments are made on time. Unfortunately it would need to be the originall agreed payments, not the reduced repayment amounts. These will probably count as missed payments.

You could wait 6 years until all the accounts have fallen off your credit file before starting to rebuild it slowly agai, making payments to a high APR credit card and making sure the full amount was paid off at the end of the month (to avoid the interest).

It would depend on the business and what your business plan was - you may have trouble getting startup money and you would need to make sure that you were able to pay yourself a wage each month as you may lose benefits. It's a tough call but it would depend ultimately if there was alot of demand for the work you would do and if there would be a constant flow of work. Would you be able to be competative?