Paying off credit card debt - credit rating?

anmouse

Hey all

First of all i'm anmouse and i've had debt and gambling problems which hopefully i'm beating now :j All support welcome!

I am currently paying off £15k worth of Debt and I'm looking for advice on how it will affect my credit rating.

So first an account of hopefully where I am...

I have a £100 overdraft which is cleared monthly (with salary) and credit card i use for fuel / food which is kept @ low balance (circa £200 out of £1000 available). The rest is split between a loan £3k which will be completed by October 2012, barlaycard - (£5k not 0%) (£3k @ 0%) (total £8k) and £4k on a Halifax credit card @ 0%.

I've got a good credit history, i have completed several credit accounts (a couple of loans, cards etc), am registered with electoral roll, lived in same house for several years (rented not owned) and been with same banks for a few years. I earn £25k in steady long term job. I've never missed a payment or bill, have no CCJ's etc.

I am currently over paying each month and hope to clear £8000 in the next year including the loan. Then hopefully look to do balance transfer to replacement 0% cards e.g Virgin

My main question is:

Will just paying down the debt affect my credit rating over the short term e.g. 1 year - 2 years?

Should I look to use credit cards for any purchases I want to make, then use available money to pay them off? So i'm actively using credit?

Or will my overdraft clearance every payday suffice for this? Plus the completion of my loan next year?

Any advice on my situation + support would be gratefully welcomed!

I'm looking to buy a house in the next 3 years (hopefully when my debt are cleared and wonder what impact it will have on my mortgage suitability.

I look forward to peoples thoughts

Tixy

Hi

Ideally it would be best not to use the overdraft every month. This is generally seen by lenders that you are unable to manage on your own wages and so are having to supplement your income with overdraft borrowing.

The credit card you use for fuel / food - do you pay off in full each month? If you do - good. Worth keeping using this each month.
The other cards - you don't need to use them for current spending - make sure you always pay slightly more than the minimum each month (even on the 0% halifax one), though it only needs to be a few quid more on that one (whilst you focus on clearing the barclaycard debt thats incurring interest).

If you are already doing those then you are doing what you can to maintain a good credit history. Obviously once your debts are at a much lower figure, or paid off entirely then you will stand a better chance of being accepted for a mortgage. When you get to that stage, then make sure you close any old credit card accounts, or reduce the limits down before you make your applications.