Really close to being debt-free...

rawkinrich

Hi all,

Since May 2009 I've really tried to sort out my financial situation.

A couple of questions regarding my credit rating please:

• If I pay everything off, my credit report will look completely bare. Will this be a problem if I go for credit/mortgage in the future?
• My Overdraft limit is £2,500. Once I pay my £2,000 debt and put some money in the bank, I would like to lower my overdraft limit to say, £1,000. Will this affect my credit rating? If so, for the better?

I would also like to say thank you to Alliance and Leicester for giving me a kick start in my quest - I opened an account with them, I got the £100 (+£50 Quidco) and they matched my large overdraft for free (12 months) which I have basically used to pay everything off. It's allowed me to save a small fortune in fee's.

Thanks for any advice

Richard

bottleofred

Hi Richard,

I'm no expert, but I think it depends how much credit you have access too, which can influence the mortgage/credit companies. Some companies don't like customers paying off the debt in full as it doesn't allow them to make a pile of interest, but a longterm, regular payment history is very good, as they'll see you paid debts off regularly over a period of time (I'm assuming this is the case as you've not mentioned any problems). I don't see how this can't affect your credit rating for the better, but someone else should be along soon with more knowledge/advice than me. You should close any disused/unwanted credit accounts.

Well done on almost becoming debt free

LeeSouthEast

You're better off getting a credit card and using it for day to day expenses, and then paying it off in full every month. This will keep your credit report rolling along nicely. Do this before you're debt free

rawkinrich

Thanks for the replies.

:beer:

rawkinrich

LeeSouthEast wrote: »

You're better off getting a credit card and using it for day to day expenses, and then paying it off in full every month. This will keep your credit report rolling along nicely. Do this before you're debt free

I've decided to have a crack at the Tesco credit card - when will be the best time to apply? Before or after paying off the loan?

The reason I ask is because I have a huge overdraft limit, and if a lender sees that you have too much available credit it's more than likely I'd get refused.

Is it wise to apply once the loan is cleared so I don't have much available credit?

Cheers

rawkinrich

Can anyone offer advice on this?

Cheers