I have paid off my debt - NOW WHAT?

ThomThom888

Hi guys,

So i have paid off all of my debt - YAY! Id like to say i did it all by saving and carefully managing my finances but my sister has lent me the money - but the result is still the same

Basically i had a credit card, loan, overdraft, mobile phone bill and another debt that i left unpaid for around 3 years when i lived in Australia - i didn't make one payment to any of them in that time.

Since returning 2.5 years ago i have repaid over 60% of the debt but have had a number of missed payments a defaults (due to being made redundant etc) I have finally paid it off with the help of my sister.

Im pretty sure my credit rating couldn't have been any worse unless i was bankrupt or had CCJ's - for which i have neither!

What i need to know is - what do i do now?
I have been told by the debt agencies that it will take a few weeks to be show as 'settled' or 'partially settled' on my credit file.

* How do I improve it?
* How long will it take to be able to get credit again? (taking the above into account)
* Will paying off my debts automatically improve my credit score? i.e. once it says 'settled' will my credit score go up?
* I understand that by having credit in my name and paying if off properly will help improve it - do i need a credit card (if so what can i get?) and will the 2 mobile phone bills i have on direct debit improve it?

I am REALLY keen to get myself back on track and start rebuilding my credit score so any help/tips you can give me would be great.

Thanks

stacey2193

Hello, I was in a similar situation myself, although my mum paid off my debts I do not consider myself to be debt free as I owe this debt to my mum and repay her each month instead of the various companies.

Noddle is a good and FREE site to use for checking and updating credit files, however I am slightly alarmed that after your sister has helped settle your debts, you are concerned about improving your credit , obtaining credit and and contemplating a credit card again. Why do you need to rebuild your credit "score". This serves no purpose unless you are actually applying for credit and I would question why you would want to do this and get into debt again ? This may sound harsh but please take it in the manner it is intended, in good faith.

FireWyrm

Should you be contemplating another credit card given how well you've done and managed to pay off the last lot?

As for the defaults, they stay on your credit file for 6 years. The presence of 'settled' against them will improve things, but at the end of the day, your track record wasnt very good and this is what will show if a search is made.

Why are you keen to 'improve your credit' though? This is only of use if you intend to borrow again and frankly, the only borrowing I would consider if I was in your position was a mortgage. Given your current record, a mortgage is unlikely until 6 years have passed and your defaults drop off.

[Deleted User]

FireWyrm wrote: »

Should you be contemplating another credit card given how well you've done and managed to pay off the last lot?

Personally, I'll NEVER have a CC again.

Once bitten, twice shy.

Lucy1010

Hi there

Forget you credit score, forget trying to improve your credit history..... just be glad that you are no longer a slave to your debts.

You really shouldn't be looking at trying to get a card.... what do you need this for? I'm only trying to help.... because before long you might just be back here again in a couple of years with a mountain of debt!

As per the previous poster's response, unless you're looking to buy a property don't even think about credit ratings! And as per the previous reply you are unlikely to get a mortgage at a sensible interest rate for at least 6 years so relax and only spend what you have. I cannot WAIT to be debt free, you are very fortunate

FireWyrm

Bedsit_Bob wrote: »

Personally, I'll NEVER have a CC again.

Once bitten, twice shy.

The worst thing I did was get a CC for 'absolute emergencies only'. I got the thing in January and by August was £4K in debt again and this was AFTER I paid off the last £2K to the previous CC that I swore was to be the very last time I ever applied for plastic.

lippy1923

Well done on becoming debt free. Enjoy it.

I would personally forget credit cards for a while and focus on remaining debt free. Try building up an emergency fund and focus on savings accounts. After you have built up a comfortable sum, then maybe look into re-building your credit file.

Good Luck x

falldown7timesgetup8

Well the first thing I would do would be to pay my sister back and buy her a massive bunch of flowers???
And then I would ditch any ideas about EVER trying to get credit again unless its a mortgage!!!

ThomThom888

Hi Guys,

As I wrote, I understand that having a credit card and paying it off properly 'can' help improve my credit score. I don't intend to get in a lot of debt again (thats the last thing i want) I just wondered if that was true?

I am 30 and am keen to improve my credit rating as soon as possible as i prefer the thought of being able to get a mortgage and credit - if i need to - than not being able to!!

I am paying my sister back over 18 months and sooner if possible.

I appreciate your (slightly irate) comments, but i just want to know how to sort things out and roughly how long it will take. For no real reason other than curiosity and for future planning!!

* How do I improve it?
* How long will it take to be able to get credit again? (taking the above into account)
* Will paying off my debts automatically improve my credit score? i.e. once it says 'settled' will my credit score go up?
* I understand that by having credit in my name and paying if off properly will help improve it - do i need a credit card (if so what can i get?) and will the 2 mobile phone bills i have on direct debit improve it?

floopnoodle

ThomThom888 wrote: »

Hi guys,

So i have paid off all of my debt - YAY! Id like to say i did it all by saving and carefully managing my finances but my sister has lent me the money - but the result is still the same

How is the result the same? You still owe the same amount of money, just to a different creditor.

I don't see this ending well - for your Sister