How long does it take to rebuild credit file after becoming debt free?

matt_oates_11

Apologies if this is a common thread, I've tried using the search function but with no luck!

I currently have two defaults on my credit file to the value of £2017 (£1740+£277) I also have an overdraft to the value of £1400 but this debt is current and up to date with no missed payments. In total my total debt is £3417 which will be paid in full at the beginning of August.

I pay my monthly contract mobile on time every month and have a positive cash balance in my bank account of around £25k with a monthly income of around 2k.

How long does it take to repair your credit score once debts have been repaid? I'm hoping to get a mortgage in the next 3 years.

Thanks for your advice!

eyeopener2

When was the date of the default? Will your overdraft be cleared in August as well?

matt_oates_11

One default is from a 30 months ago and the other 6 months ago. All debts including overdrafts will be paid off and I will have no debts. My balance will be in credit by £25k.

rising_from_the_ashes

Until the defaults drop off (6 years from when they were issued) they will impact your credit rating and your ability to get more credit / mortgage etc.

Once they get older & if they are settled in full they will have less impact .... but will do so nonetheless.

Good way to rebuild but only if you can ensure you don't rack up more debts - is to get a credit card and use it for something each month eg fuel and then clear it in full each month. HTH

matt_oates_11

If it affects your credit 6 years from when they are issued what is the point of paying the debts off because regardless of whether you settle the debt or leave it unpaid the default is still affecting my ability to get credit/mortgage. Am i correct?