Best way of improving credit in my new circumstances

jonnym8083

Ok in short my credit is not good. I have defaults and have a dmp set up with step change. This mainly consists of around 9 small debts totalling bout £6k. I have no CCJ and fingers crossed I never will.
My grandfather recently passed away and I have inherited a large some of money. It's not a retiring amount but enough to buy a house in need of modernisation and do it up. My plan is to do this and then take equity out of that property to buy another and rent it out. I will of course pay off debts before I entertain buyin property. My only concern is I would not need mortgage to first purchase a house but I will once I decide to take equity out. I want to build up my credit rating ASAP. Would owning my own home auto improve my credit as I would have good stability. I want to know any advice where I can get credit improved. Would having a decent sum of money in my account auto improve my credit rating?
Any help would be great fully received.
Many thanks

jonnym8083

Someone please advise me

rabbit_burrow

No, owning your own home would not auto improve your credit.

Stability is from many factors: length of time at address, length of time with your bank, length of time in a job.

I own my home, have lived there for 8 years, had my part-time job for 7 years, been with my bank for 9 years, but even with that 'stability' I cannot obtain reasonable credit due to a default on my file which won't drop off my file until the end of this year. (It shouldn't be there and should've shown as defaulted in Jan 2007 and thus dropped off by now, but hey ho).

Cycrow

Theres no quick way to improve your credit rating.

best of using the money to clear all your debts if you havn't already, then check your reports to make sure everything is all settled then just start to build up credit history from there

how long ago were the defaults recorded on your accounts?

jonnym8083

Defaults couple quite recent in last couple months when entered dmp others couple years back still on arrangements with them.. When my inheritance clears of course I will be paying these off in a flash hopefully gettin a settlement figure. Just wondering if got done money in bank then are my bank likely to approve credit card so I can build credit up

rabbit_burrow

Even though you will have paid off the debts, the defaults will stay on your file for 6 years. You may still find it difficult to obtain credit, it all depends on the lender.

jonnym8083

What would you suggest a mortgage or credit lender? To get card to build credit. Even looked at pre paid cards

bargainbetty

jonnym8083 wrote: »

What would you suggest a mortgage or credit lender? To get card to build credit. Even looked at pre paid cards

Neither. Clear your debts, get yourself straight and then look at how much you have compared to how much you need to refurbish a property. Once your debts are cleared, you might find you can save up additional funds towards the project while your rating improves.

If you really cannot wait, talk to your existing bank. Get straight, and then have a chat with a financial advisor in person. If you have sufficient to buy a property free and clear, and secure the loan against it, you might have some chance.

Please remember, just because you want to do things this way, doesn't mean the banks have to let you do it yet. You have recent issues, and they might want to see at least six months to a year of money management before they let you take credit again, even secured on a property.

Thrugelmir

jonnym8083 wrote: »

When my inheritance clears of course I will be paying these off in a flash hopefully gettin a settlement figure.

This will merely extend the time before you'll obtain any mortgage finance. Playing games won't aid your cause. Lenders simply aren't interested in people who do.

jonnym8083

Playing games??
How is getting a whole figure settled playing games rather than paying off monthly? The quicker debt paid off the better.

Thrugelmir

jonnym8083 wrote: »

Playing games??
How is getting a whole figure settled playing games rather than paying off monthly? The quicker debt paid off the better.

Partial settlement is a default. In doing so you will therefore block access to future lines of credit for some time. There's no short cuts if you wish to be taken seriously.