Positive Impact on Credit Record?

Packers

Hello all,

I'm VERY close to my debt-free day; I'll hit a huge milestone come the end of November this year having paid off a monster £15k HSBC loan, a £5k Virgin Loan and a £5k Welcome Finance loan leaving me nearly £500 per month better off (with just a few low balance credit cards to mop up)...it's taken 5 years of belt-tightening and self-deprivation, but I can't WAIT!

My question is- if you pay off a loan, does it have a positive impact on your credit rating? I have never defaulted on any of the loans above. I don't plan on getting any more credit cards / loans, but I would like to get a mortgage in the next 3-4 years and I want my credit record in the best possible condition to secure the best rate.

I also wanted to say to anyone struggling or who has just woken up the the amount of debt they have- I've been there; I know it's hard but realising the extent of the problem, looking it in the eye and tackling it head on is the best thing you can do. I was at my lowest ebb 5 years ago- had just taken a £10k pay cut, fallen behind on credit card repayments / loans, etc- didn't have enough money to feed myself or keep a roof over my head. Here I am 5 years later...ready to start saving for my wedding, looking at buying my first home and starting a family...it is worth the fight. KEEP GOING!!! As my bank manager once said to me (believe it or not)...it's only money!! Your health and sanity are far more important.

Good luck all on your money-saving missions!

Packers

yorkshire-lad

congrats on paying off such a large amount:T.
think you should treat yourself to something nice when you have made those last payments.

i am in a very similar boat to you, my last payment for my car is in Nov, and i am planning to go away to just relax on the beach and think about the things i have accomplished and plan my future.

this is a massive turning point in my life:D.

with regards to your credit rating, it will show on your credit report that the loans are settled and it will show new potential lenders that you stick with your agreements, and they will more likely lend to you than say someone who had a few late/missed payments.

i would recommend keeping a credit card open and just buying the shopping on once a month and pay it off in full. then you are still showing lenders you are managing your money well.

Good luck!
YL