Get debt free and buy a house, help?!

mwr789

Hi All,

I am currently renting with my partner and we are moving out at the end of Feb to go back to her parents to save to buy a house.

I am in debt at the moment (Small debt to some) but i need to get out of it.

I owe £800 to FPC for Vodafone. £300 to Capital one on a credit card and £800 to clear my overdraft with Halifax. I am hoping to clear these in the next month or two as I have 750 coming back from a deposit from the rented property we are in, but am just looking for some advice.
Which to pay first (Can I haggle FPC down as a final settlement rather than paying the £15 a month I am now? I have heard you can but what is the best way to do this?) Also is this classed as a default?

I will have these payed off soon, and will work out a plan to save as where we have been renting for the last 15 months we could have saved enough for a deposit on a house. What I am wondering is how can I build my poor credit rating quickly to get a mortgage at a good rate ? My partner has never had credit so we know she needs to get some too.

I was wondering if paying my credit card off and then spending and keep clearing it every month is best but i really dont know how?! I just want to know the best ways

If it helps my average wage as i work in sales is £1500 take home and my partners £900. With joint out goings at £750 once moved into her parents after paying rent and car insurance ETC.

Many thanks

Max

neverbefore2011

mwr789 wrote: »

we are moving out at the end of Feb to go back to her parents to save to buy a house

how does that work?

MoneyMagic01273

OP, first step is to pull your credit file from the main 3 credit agencies (Equifax, Experian and Callcredit) You can do this by either paying a small statutory fee to the CRAs or by applying to the CRAs using their "free trials". Details can be found on these forums.

Taking a look at your credit files will tell you what information is showing there and help you assess the current situation.

There is no magic wand for repairing or improving your credit health outside of common sense. Don't take out too much credit (and don't apply for too much credit), pay off your existing creditors on time - everytime and ensure you are on the electoral roll at your current address. Cancel any unwanted or unused credit cards but try to ensure you have some active credit accounts on your file - a small credit card, a small overdraft, a mobile phone contract. Again, ensure these are paid off regularly on time, everytime.

I have no experience with FPC but as they are a debt collection agency I suspect you do probably have a default lodged against you from the original creditor. I see no reason why you cannot make a F&F offer to them if you want to. The worst they can do is reject your offer - however they may make a counter offer that you feel is acceptable. Ask them (preferably in writing).

If you do have a default on your account, do try to ensure that it is settled asap as it will cause you a problem if you try to apply for a mortgage . Having a default marked as "settled" on your file is better than having an unsettled default. And creditor assessments of you will gradually improve over time as the settled default gets older and older.

Prioritise the remaining credit card and OD debt according to which is costing you more in terms of interest. Your CC debt however is pretty small and so if you can make an effort to try and get rid of that completely in a month or 2 and then fully attack the OD, you should be fine.