Thoughts on my improvement plan

aewaite17

Good Evening,

Just looking for any thoughts on my improvement plan for my credit report, but first, a few facts:

Nov 2012 - Signed Scottish Trust Deed which became protected, which included defaults on:

3 Current Accounts (Overdraft)
1 Personal Loan
8 Credit Cards

Since this, I have today reviewed my Experian and:

2 CCs show as settled (No default mark in the history)
1 CC shows as "up to date" after 1/2/3 month over (no default, but still balance)

I have currently:

1 Current account (no overdraft)
1 CC (no missed payments / up to date)
1 Mail Order
1 HP agreement

I also have (not on equifax) - BT home phone, Gas & Elec DD, car insurance DD & 2 phone contracts

That is pretty much my financial situation.

Now - for future plans to repair.

I intend to keep the mail order, current account and CC ad-infinitum to maintain an in/out on my report.

I have just under 12 months left on my HP, and would like to refinance the remainder. However, I have just been rejected for a further phone contract so it seems unlikely that I will be able to refinance the remainder of the HP.

I would like to get a mortgage at some point in the future, but am pretty sure I will need to wait until 3-5 years (counting from this November).

I am in the good position that by September this year, my salary will increase by at least two times, and will continue increasing for the next 10 years. I am also set to receive an inheritance, which will be used to pay off the balance of the TD, and any remainder going towards a deposit.

My masterplan is to pay off my TD, get everything marked as settled (to offset the defaults at least a little bit), then get a prepaid card to continue building credit. While this happens I will keep hoarding savings for a house, and will hopefully have nearly £60k funds saved by the end of next year.

Where should I go from here?

Thrugelmir

aewaite17 wrote: »

Where should I go from here?

Find a hobby to pass the time.

You've defaulted on a number of financial institutions so don't expect them to readily accept your mortgage application, even with a large deposit. So what will matter is some years of spotless financial behaviour.

Claree__x

Hiya,

I've also signed a trust deed (1 payment to go, woohoo!) and I'm slightly concerned about your plan to pay it off with your inheretance and the your salary increases. Please do not be offended if you know all of this but you do know that if your salary increases then your contribution will also increase accordingly?

I'm not 100% sure on the inheretance but I was under the impression that a trust deed wasn't just something you could buy your way out of at the rate you're paying now (for example, I pay £190 p/month, if I had 6 months left I don't think I could make a lump sum payment of £1140 and be done with it) - I could be wrong though so best check with your IP.

Best thing to do would be ensure that the defaults on your account are dated on or before your trust deed date to make sure they drop off of your account on time but it's unlikely you'll be able to obtain credit at a reasonable rate until 2018 unfortunately.

aewaite17

Hi both,

Thanks for your responses. Spotless financial behaviour shouldn't be an issue as I have been beaten quite hard with the debt stick now... I have no plans to bite off too much.

Ref the TD bits - I have based my calculations on total cost of debt, 8% statutory interest & trustee charges, and have emailed the company I am dealing with today for clarification on what my situation will be.

I am on a 5 year TD at the moment, and disregarding the inheritance, I should have cleared the total above within 3 years with my pay increase. With just the inheritance, I should clear the above in one hit.

I have read about people being offered early exit terms, usually at a fraction of the total amount. While I have no interest in underpaying, especially if I can suddenly afford to sort myself out, I will obviously see what they are willing to accept as a settlement fee.

I have handed this all over to my IP for answers, and as soon as I get them, I will add back on here (for anyone else searching in the future!)

Thrugelmir

aewaite17 wrote: »

I will obviously see what they are willing to accept as a settlement fee.

The will trigger another file marker. Remember these same financial institutions are the ones you'll be applying for a mortgage from. So don't expect to be welcomed with open arms if they've previously settled the debt on a full and final basis. There's a cost and consequence to all actions these days.

aewaite17

The settlement is via my trustee, not via the institutions. At present the creditors will be getting about 25% of their actual debt, so anything I can offer in excess is better for them. Nontheless, they only file markers they can add from now are settled / satisfied / partially - they cannot do anything else. The only reason for me settling early is to pay off the total amount in one hit (including interest), thereby stopping my monthly payments. If this won't happen, I will not make the request. My thoughts are that it will benefit the trustee, who will be getting his fees and more funds for the creditors in the process.

My current account is with a "clean" institution, and I have resigned myself that I will probably be reigned in to this institution for quite a while (at least until Nov 2018). However, they will also have records of my income / outgoings and savings in the future, which will act in my favour.