Help me get my credit rating back on track

ryandotdee

Hello Everyone

Me and my partner would like to buy a house together, we do not have the deposit yet, but hope to have this together by christmas. The main thing worrying me is my credit score. My girlfriends credit rating is great, but mine is not so good, so I want to get everything sorted whilst we save the deposit, so that when the time comes, we are in the best possible situation to get accepted for a mortgage.

My Debts:
No Defaults or CCJ`s
4 late payments in the last 12 months ( about 8 months ago )

Capital One - 1550/1500
Vanquis - 980/500
Shop Direct - 250/500
TopShop Card - 160/200

I have some history of PDL`s, all of which were paid on time and for small amounts, these are now a thing of the past.

I have agreed a settlement figure with vanquis for £740 which I am paying this month, and we are clearing my topshop and shop direct balances the month after.

The main advice I need, is how best to improve my credit score between now and the new year? Should I keep the topshop card open, buy a few bits each month on it, and pay the full balance each month? Or close it?

I guess the other option is to start using the capital one card as well as paying it off ( was just planning on upping the monthly payment )

Any pointers or advice would be gratefully received!

Ryan

vics199

Hi, I'm in a similar situation to you in that I desperately want to improve my credit rating whilst also paying debts so that I can get another mortgage with my boyfriend for a family home (I currently own a 2 bed terrace). I know you don't owe as much as me but I'll give you some suggestions and info that I've come across and see what you think.

First of all, it looks like you've made an offer to vanquish to pay back less than you actually owe them, did I read that right? I would have thought that that will not look good on your credit rating and would have thought that would get marked down as an 'arrangement' but not 100% sure on that as I've never done it.

Late payments: Don't get any more of these! Set up direct debits for all of your cards so you make all of your minimum payments on time. Late payments really drag your credit rating down as it shows your not reliable. You will need at least 12 months of no late payments and not going over any overdraft limits before anyone is likely to consider you for a mortgage.

Balances on credit cards are also not good and mortgage companies are actually more likely to accept you if you have for example, a £5000 loan and overdraft rather £5000 debts over 4 credit cards. My personal plan is to pay off all my credit cards and leave my overdraft and overpaying my loan until all the credit cards are paid off. It doesn't look like you have a loan but just trying to make a point about how bad credit card balances look. Whats worse though is if your card balances are very near to your credit limit. So if you don't think you will get them all paid back before you want a mortgage then look at trying to reduce all of the balances down. Once you have cleared them, I would recommend cancelling all but one credit card. You could then use your credit card to pay for, say, groceries and petrol each month as long as you are good with your money as you will need to make sure you don't spend the cash in your bank account so that you can pay the bill off in full the next month.

I personally would also cancel the storecard as they are dangerous and encourage you to buy clothes that you either don't need or could get cheaper in a different shop with cash.

Once your cards are empty, it doesn't really look good to have loads of unused credit available to you as you could just go and max it out at anytime. So one card is best but keep the one with the lowest APR just in case.

Lastly, don't keep applying for things like 0% credit cards, car finance etc within 6 months of applying for a mortgage. All applications go on your credit record and more than 2 applications in the last 6 months will probably get you declined.

Hope all of this is of some help to you but you don't have to take it as gospel, its just my opinion.

CBN

If you are over limit on cards and have come to an arrangement on a debt then your credit rating is beyond much repair in the timeframe you are talking about.

CBN

The advice above on moving things in the right direction is solid.

Angry_Bear

ryandotdee wrote: »

No Defaults or CCJ`s

Vanquis - 980/500

I have agreed a settlement figure with vanquis for £740 which I am paying this month, and we are clearing my topshop and shop direct balances the month after.

I'm not 100% sure, but I would think that Vanquis will mark your account as a partially settled default, which would probably scupper your chances of getting a mortgage for the next couple of years.

matttye

Angry_Bear wrote: »

I'm not 100% sure, but I would think that Vanquis will mark your account as a partially settled default, which would probably scupper your chances of getting a mortgage for the next couple of years.

An Experian company representative who posts on these boards said that Experian shows defaulted debts as 'satisfied' when paid off and non-defaulted debts as 'settled' when paid off.

Noddle does the same as Experian.

Equifax shows both as 'settled.'

[Deleted User]

OP the late payments will stay on your history for another 5 years,and a history of pdl will go against you,mortgage lenders are fussy now so it doesnt look great