advice on debt and credit rating.

Cazza1

Hi there,
Not sure if I'm posting in the right place but I need some more advice! I am thrilled to say that my CC is paid off, in full this month and have never defaulted on this. Well not for at least 8 years anyway. Plus I've been told that because of my OHs bankruptcy the council are not seeking to recover the whopping 1200 overpayment, can't begin to tell you what a relief this is! So we've gone from having nearly 5000 in debt to about 1700. Which is my overdraft, am 1300 overdrawn and 375 to scott and mears debt collectors.

This is where I need the advice. The 375 is for overpayment of salary from my last month of work in 2008 when I left my job to go to uni. I didn't notice at the time because I never checked my bank balance! Anyway I couldn't afford to pay when I was at uni and now I've started work I pay 5 pounds a month. Not much but we have so little that it has been all I could realistically afford. I will be able to pay more now though, I can clear it next month probably but this will take me more overdrawn.

I'd like to know how this debt affects my credit rating as its not from personal credit debts but yet it is still obviously a debt. Long term we'd love to buy our own house. This obviously means that we have a long wait because of OHs bankruptcy but I'd like to do all I can to make sure my credit rating is fairly good. Does anyone know if this will be on my credit file and will my rating only start to improve once the account is settled?

Thanks, hope someone can help!

Caz

bottleofred

Hi caz,

The only way of knowing if this debt is on your credit file is to get copies of your file. Equifax and Experian both do free 30 day trials via the internet or you can post away for a copy (£2 I think). If you do sign up for the 30 day trials, cancel them as soon as you get the copies of the reports as it's easy to forget and then get charged.

DVardysShadow

As I see it, the debt should never appear on a credit file - unless a CCJ was obtained - as this is not credit and you would never have been asked for permission to record this data.

Cazza1

Thanks for the replies. Yes I think I will check my credit report, remembering to cancel it before the 30 days are up! Fingers crossed its not on there. I have never received a ccj on it and have always paid cc payments on time. Thing is that I'm on quite a low income as I only work 18.5 hours a week so I suppose my rating will never be great. The limit on my cc is 4000, do you think I should get this reduced? I only ever went up to 1800 on it and 4000 seems silly!

lvm

The hours you work or your salary/wage won't have anything to do with your credit file. If you've paid all your credit cards on time, haven't defaulted for at least 6 years, you should have a near perfect score.

It might be worth reducing your credit limit slightly if you feel you need to but £4000 isn't too much - and if there's a chance you go nearly up to the limit, this will look worse on your credit file as it will appear that you're using nearly all of your available credit as opposed to only some of it if you kept the £4k balance.

Personally I'd probably keep the £4k but only if you 100% definitely don't get tempted into using it for anything and everything - I use mine for petrol only and have direct debit set up to pay in full and that works quite well.

krycek985

When you get your reports dont be shocked to find some mistakes on it.

My reports all had erroros on them. A bit shocking considering this is what banks etc look at to dish out credit or not in my case.:D

Cazza1

I really don't feel tempted to use the card at all. I have well and truely experienced my LB moment so just want to use the card to improve my rating. Last year I was a student and was paying it off in full then between uni and job spent on it and paid monthly. At this time I tried to get a 0% card and do a balance transfer but was declined. I tried again a few months ago and declined but my income was obviously much smaller then, possibly from being a student? I have continued to pay monthly and cleared the balance of 1666 this week woop woop. Think I will keep the 4000 then. My friend told me that your rating is lowered the more credit you have available because it takes more of your wage to pay it off??

Think I may do the petrol thing and arrange a dd for the full amount. That seems like quite a good idea. Will be interesting to see my report too. I saw it a few years agobut can't remember what it said. Think it was ok.

Finally feel I'm making progress, so easy to get into debt without savings and a job! I'm not a spendaholic at all but me and oh have really been through a rough patch. X:(