Poor credit. Mortgage? Plan of action?

concrete_kid

I plan to get a mortgage in about 3 years time, however I've just checked my Experian credit rating and it is 635 (poor) and I would like advice as to what is my best course of action over the next 3 years.

Details of my poor credit :-

2 year old default for £457, will be fully paid off in April this year.

7 payday loans. I've recently got a full time job as a nurse after finishing my training in January. So I'm much better off now and will not be getting any more payday loans.

My credit report also shows my phone contract (always paid on time). And my current account (no negatives there).

I'm in the process of becoming registered at this address on the electoral register.


Right, thanks for sticking with this...now the mortgage.

I have inheritance of 10k, plus 5k which I aim to save myself over the next 2-3 years. So 15k deposit.

I will hope to borrow 60k, so 75% LTV?

I earn 21k, so would be borrowing 3 times my income and I am single. I have a 2k overdraft (which I hope to pay down but no other loans or credit)

Anyway...What are my chances? Will my credit improve in 3 years. The default will be 5 years old. I basically just want to plan for the future, but will rule out buying if I am unlikely to get a mortgage and consider other options.

Apologies for the length of this post, but I know there are lots of experts on here. Thanks

kingstreet

Stop paying for this alleged credit score, as it's meaningless.

Monitor your credit files from time to time, by ordering your statutory paper file for £2 each from all three CRAs. The information on each may not be the same and you need to know if there's anything wrong on any of them.

£15k deposit and a £60k mortgage is 80%, not 75%.

The adverse will be well historic by then, so you should be fine. Stay away from PDLs.

Get a credit card and use it for usual expenditure. Pay it off each month so no interest is paid. Such conduct will help to balance the negative of the default.

Make sure you get on the electoral roll ASAP.

concrete_kid

Thanks for your help.

I'm now on the electoral register and have applied for a credit card. just one more question, could I just spend say £10 each month on the card to improve credit or does it have to be a bigger amount.

Thanks

Thrugelmir

Once clear of your debt and overdraft. Consider one of the lenders FTB's schemes instead. Such as Nationwides Save to Buy.

Wean yourself off credit. Learn to use cash.

ACG

75% mortgage you will have no problem at all.

I managed to get some lenders to accept someone with a £2k default 2 years old - not paid off! You wont have a problem.

It might not be the 2-3% deals your seeing but no reason why it cant be a relatively decent interest rate. I think you could probably go and get a mortgage tomorrow at 75% LTV.

concrete_kid

Thank you. That makes me feel much more positive. I didn't want to put all the effort into saving for a deposit only to find out I would not be able to get a mortgage.

My next big challenge is getting rid of this 2k overdraft!