How long will my credit rating take to improve?

little-jo-jo

Hiya moneysavers

Am wondering if anybody can help me...I got myself in a mess at 18 with debts so am on a DMP and will be debt free next year.

I'm 25 next month and me & my boyfriend have been together forever so one day are hoping to save and buy a house but obviously with my credit at the moment (or anytime soon) that would be impossible.

Does anyone know how long my credit will take to get back to an acceptable level to be accepted for a mortgage? (obviously assuming I am sensible and do nothing to jepodize it further). Will we ever be able to get a mortgage or have I messed things up completely?

Thanks xoxo

hallsy85

If you have any defaults, they take 6 years to drop off your Credit Report. I'd advise getting your credit report from each of the 3 main agencies and taking a look at the situation from a lender's point of view - you should be able to find links in the stickies

little-jo-jo

I have 2 defaults due to drop off around the same time my DMP plan will be over.
Does my credit rating just 'ping back' as such as soon as the defaults have dropped off or will i have to spend time building it up again?

Thanks for your help

hallsy85

You'll have to spend time building it back up again - be sensible and don't take any unnecessary credit whilst your in the DMP. Once out you could use a low credit card with a limit of £200 or so, use each month but pay all of it off each month. It will take time, but you can rebuild your credit that way.

Have a read around to find some other credit-building tips, and be sure to check Martin's report

The_Boss

And remember - do not take notice of the CRA credit scores. The important stuff is the data reported by the lenders, not some imaginary figure that they want to charge you for.

little-jo-jo

thanks for the advice both of you. okay so I have to rebuild so how long (completely rough estimate) would it take to rebuild a credit score from scratch to perfect? months? years? 5years? any sort of rough idea would be so so helpful just so I have a vague idea what im dealing with xox

The_Boss

little-jo-jo wrote: »

thanks for the advice both of you. okay so I have to rebuild so how long (completely rough estimate) would it take to rebuild a credit score from scratch to perfect? months? years? 5years? any sort of rough idea would be so so helpful just so I have a vague idea what im dealing with xox

Assume the defaults will drop off next year, right?

The answer really is : the longer you have an unblemished credit file the better. Having several credit accounts all in order is looked at favourable by lenders. Assuming you have a mobile contract, 3-4 credit cards will help to build up a good profile a bit quicker than having 1-2 as there is more data available showing you are a responsible borrower.

The danger with having 3-4 cards (not that it has affected most people) is the temptation to spend on it for the sake of it or blow the whole limit. You only need to make a small purchase each month (even £1!) and repay this in full each month to start building the file. Of course, you won't be able to get several cards immediately so start with a Vanquis, Aqua or other sub prime card.

Do not pay too much attention to the CRA scores though - yours would likely jump after the defaults come off, but lenders may still have concerns at lack of history/live account data