Rebuilding Credit Score

CreditJunky

Hello! I'm a new Debt Free Wannabe!!

Me and my partner have had a rough couple of years and ended up living on credit at one point. Most things are paid off now but we have one defaulted account on our credit file which I understand will take 6 years to come off(?) - even though it is paid up in full through the original company, it did not go to debt collectors.

According to my file at the moment, we have all the credit we are going to get - which is 2 credit cards and a loan (totalling £10,000).

How do we rebuild this as we are wanting to buy a new car as soon as possible. What is the best way to pay it all off quickly? One credit card at a time or split our overpayments over them both?

MrsTinks

The best and quickest way is to pay off the card with the highest APR first

Your default will drop off 6 years after you defaulted.

onlypaddy

use this site to calculate the cheapest way to pay them off, in interest order

http://www.whatsthecost.com/snowball.aspx?country=uk

learn2cope

CreditJunky wrote: »

Hello! I'm a new Debt Free Wannabe!!

Me and my partner have had a rough couple of years and ended up living on credit at one point. Most things are paid off now but we have one defaulted account on our credit file which I understand will take 6 years to come off(?) - even though it is paid up in full through the original company, it did not go to debt collectors.

According to my file at the moment, we have all the credit we are going to get - which is 2 credit cards and a loan (totalling £10,000).

How do we rebuild this as we are wanting to buy a new car as soon as possible. What is the best way to pay it all off quickly? One credit card at a time or split our overpayments over them both?

If you use a snowball calculator you cab experiment with how much money you have to throw at the cards and it will tell you how long it is going to take. This is the one that I use http://www.whatsthecost.com/snowball.aspx. You can try ticking the highest apr or the option to pay off the one with the lowest balance first. It is amazing to see what paying an extra £10 a month can do!

learn2cope

onlypaddy wrote: »

use this site to calculate the cheapest way to pay them off, in interest order

http://www.whatsthecost.com/snowball.aspx?country=uk

Great minds!:rotfl:

CreditJunky

Thank you for your help. How does rebuilding work? Will I see an instant increase in my available debt once everything is getting paid off more and more or will this default hold it down and will £10,000 be my limit until that has gone?

MrsTinks

There is no such thing as "available credit"... how much a lender is willing to risk lending you will depend on your repayment history, any defaults and late payments, how much debt you have and how much debt you have available to you (ie if you have a £20k limit but you're only using £10k then they will ask why you're asking for more being as you have £10k immediately available to you now...) and your income and if you are registered on the electorate roll...

There is no magic formula because all lenders apply their own criteria.

However... the default will certainly be an issue although less so the older it gets providing it's marked as settled...