Credit Rating

Yorkslad24

Hi there first time poster here. i have a question about credit rating. About 4 years ago i accumulated quite a bit of debt through various loans which i missed payment on/didn't pay and which were sold on to various debt collection agencies.

£1500 Lloyds tsb loan
£1000 various payday loans
£500 catalogue

All of these were ignored for around 2 years until i agreed a repayment plan with 3 different collection agencies. I have now payed the majority of the debt and am left with about £300 to go.

I was wondering how i can now get my credit rating back up so that i can apply for loans/mortgage in the future?

will these agencies have updated my credit file one the debt has been payed and will it have any effect?

and any suggestions of things i could do to improve my rating (i know it is bad as about 1 year ago i couldn't even get a mobile phone contract)?

Any help much appreciated,

thanks

fozmcfc

Firstly hi and well done for getting yourself straight.

Unfortunately you could be unable to get anything decent for upto 6 years, but there are some sub-prime credit cards, such as Capital One, Aqua and Barclaycard Initial you could try for.

I'm not the best person to give advice as I haven't really had to deal with sub-prime, but there are plenty around here who can offer advice.

Didn't want to just read and run, well done again for tackling the debts. :T

KingElvis

I would imagine that Vanquis would be your best hope, BC Initial and Aqua are the picky ones on the bottom....

Capital One "Classic" might also be worth a shot.

All these would help build your credit rating but the interest rates are murderous if you're rubbish with them.

Benzyl

Hi,

I also messed up my credit when I was younger.

I got out of it but getting a capital one credit builder card, it had very high interest rate so I used it only for Petrol and paid it off every month in full.

The in FULL part is the really important bit in the last 8 years I have never missed a payment and this is what seemed to allow me to get better credit terms.

Be aware you are to use the Credit card like a Debit card ALWAYS, ALWAYS pay off the full amount each month.

If you do not think you can be disciplined like this then I suggest you wait it out

Yorkslad24

Thanks for the replies,

i wasn't expecting an instant fix so appreciate it may take time it's just knowing where to start i suppose.

Guess it be worth paying for a credit report so i can check if everything has been updated?

Tixy

Hi

Having a active account like a subprime credit card can help you start to improve your rating.

That said even with such a card you won't really make any substantial improvements or be able to get high street credit until all your defaults are gone from your credit file. Defaults stay on your file for 6years so you probably have a couple of years to go yet - depending on when your creditors actually issued default notices. Settled defaults are a little better than outstanding defaults but both will have a significant impact on your file.

If you read this article http://www.moneysavingexpert.com/cards/bad-credit-credit-cards it should give you an idea of which subprime card you might get. Also worth a read of this http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Don't pay for a credit score - but do have a look at your statutory credit reports to see what they actually show and what defaults etc are on there (£2 per agency although there are also some free trials about - providing you remember to cancel them before they start charging).