Credit Rebuilding Help

Azelol

Hi all,

I was looking for some help if possible, because it seems almost impossible to get a definite answer online about the improvement of my credit score. Now I finally have a good job, I need to get it sorted pre-mortgage.

I have had no missed payments over the last 2.5 years, and am within my credit limits on everything. I have an indebtness of about £3500 in total (including the defaults). All of these are green on my file.

Now the issue is with 2 defaults on my file from 'Lowell Portfolio on 19/06/2008 for £458'. This is unsettled, and has been sat there for years. The second is 'Arrow Global on 09/04/2008 for £531' and again unsettled.

The question is, is it better for me to completely ignore these and wait for them to drop off in 2 years, or do I pay them in full/ask the company to settle etc now? I seem to have read that if I make a payment/settle it will bring it back up to date, and have a negative effect? At present my score is so low, it's hilarious, and as such need some advice on how to improve it.

Thanks in advance

Tixy

Having defaults on your file will certainly mean you will not have a good credit file until they drop off.

As you've asked regarding mortgages its possible to get subprime mortgages with small settled defaults on file if you also have some more recent accounts with good conduct showing, I'd think it was almost impossible to get even a subprime mortagage with unsettled defaults on your file.

If you pay up on these defaults it does not prolong the time they are on your file, they will still drop off after 6years regardless of what you do not.

Don't get hung up on the score that the different credit reference agencies will sell to you. Its what is on the main credit report that is important as that is what potential lenders will see.

If you intend to get a mortgagae before summer 2014 then you will be likely looking at subprime mortgage, which will be more expensive and need a higher percentage deposit that high street lenders.
You could go and see an independant mortgage broker with copies of your credit files, financial details & details of how much deposit you have and see if they think its realistic that you would get a mortgage with those on file if you settle them.