Clearing debt & improving credit score

manchesterbambi

Hi all,

I'm currently in a not-so-favourable amount of debt and am in the middle of battling like a trooper with it to clear it before the end of the year. It's currently at about £10k, but if I stick to my financial plan it will be at £0 by 1st Jan 2011! I know my credit score isn't great, but this is only due to the amount of debt I have, and the fact that it is spread across 7 companies (I have 2 small overdrafts, 3 credit cards, and 2 loans). I have never once in my life missed a payment, and I've never had any CCJs etc etc. Unfortunately the debt was built up whilst at uni and due to a couple of significant financial burdens I've had since. I've actually done very well and have already paid £5k since Jan this year!

So, my question is this - will my credit file automatically improve once I have paid all of these things off? And if so, how long does it take? I'm going to be applying for my first mortgage straight after the new year and am concerned that even though I'll be debt-free by then I may be "marked" by the past.

Anybody know anything about this stuff?

closed

Have you saved up for a deposit?

DEVONLIFE_2

Hi manchesterbambi
Provided you have paid on time no late payments etc then you should be okay. There are a lot of factors that affect a credit file. The best thing to do is get a copy of your credit file before you apply. You seem do have done very well. Keep it up and you will be debt free.DL.

manchesterbambi

My partner has the deposit for our mortgage, I'm just basically applying for it with him. I just don't want my credit file to cause us any problems in getting a good rate - as his is sparkly clean!

I've never had a late payment, never missed a payment, never had any problems at all. I've made sure I'm on the electoral roll too. My credit file actually looks fine (I got a copy of it a short while ago), I just know the score isn't good because I have too much debt in too many places - and the last loan I got was offered at an extortionate interest rate as a result (that was over a year ago though). Although next week I will be able to tick one more debt off... and I cannot tell you how good it feels to do that!!

closed

You'd probably save a lot of interest and clear up your credit file earlier if you borrowed 10k from him and paid him back with interest over the next 8 months.