was this the right choice

soontobemrsg

I recently had backdated money paid to me (not a huge sum) which I used to pay off my overdraft facility in my current account (which until last month was interest free as it was a student account). The account was at it's limit every month but appeared as OK on my credit report.

I have two small debts, one to Express Gifts which has lay dormant for over a year and no further interest has been added. The other is for a mobile phone contract which defaulted in 2007.

Should I have paid off the debt to get the default off my credit file or used it as I did. I can still use my overdraft facility to pay off the debts in full if I made the wrong choice.

What would you have done?

I intend to contact Express Gifts and start making payments again now that I am finally getting some income, but will they then start charging interest again?

I am still unsure re the phone contract as I disputed the amount with them years ago as I had lost the phone and believed the calls to be made by someone else and basically refused to pay and they have never chased me but it still appears on my report. (Obviously I'm reluctant to start questioning it now with it being due to drop off in a few months).

Little_Miss_Uni-Debt

Clearing any debt is a good thing. I would suggest to reduce your overdraft down - even just a bit so that you can't go back into it again.

Perhaps you should check to see what the rough balances are registered for these other debts are. You can use Noddle.co.uk for free and it lists out what you owe.

Then if you can afford consider clearing them in full or starting repayments.

soontobemrsg

Thanks for the reply. There is £385 outstanding to Express Gifts and £237 to Orange. My overdraft limit is now £600 and I am finally in credit :j

I read somewhere that to improve my credit rating I would do best not to reduce my overdraft limit further (even though I don't intend using it) as a higher limit that you don't use shows that you are better at managing money than constantly being overdrawn upto a smaller limit. Not sure how right this is?