Help & Advice On Improving My Credit Rating

Dannyleeds1986

Hi everyone,

I was just wondering if anyone out there could give me any advice on what the best way to improve my credit rating with lenders would be? My credit rating is very poor from when I was a little younger and took out credit for everything and I couldn't realistically pay back. Anyway since becoming a Dad 18 months ago I have come to realise I was foolish, and wanting to buy a house in the future. I have now set up repayment plans with all my creditors that appear on my credit report my self and will have all these paid off within the next couple of years. I have 2 CCJ's that are now settled and god knows how many defaults on my report.

I was wondering on what the best way of improving my credit rating would be as I can't get accepted for credit for anything (including mobile phone contracts, even the bad credit credit card companies won't touch me) or will the likely hood of making payments towards my current debts help improve this and show other lenders as time goes on that I am less of a risk?

matttye

You could get a prepaid credit card (no credit check), which appears on your file as paying back a loan over the course of a year. There's one called 'Cashplus creditbuilder.'

Do your three credit files show you as being on the electoral roll at your current address? If not, this will help.

Ultimately I don't think you'll see a vast improvement while your debts are unpaid, so it may just be a case of waiting a while.

In the meantime you could use a snowball calculator - http://www.stoozing.com/calculator/snowball-calculator.php - to check if you are clearing your debts in the most efficient way possible. However, I would pay off any overdrafts first if you haven't yet defaulted on them, as the bank can withdraw overdrafts at any time and make a bad situation worse!

Dannyleeds1986

Thanks Matttye,

They didn't so I have just put my self on the electoral register. Unfortunately I did default on a bank overdraft, I have since closed the account and settled the outstanding balance.

Just wanting to know if there was anyway I could help improve it while settling my old debts. There are 3 or 4 I can settle in full in the next couple of months and then just 2 big ones to pay back over time would this help in anyway?

matttye

Dannyleeds1986 wrote: »

Thanks Matttye,

They didn't so I have just put my self on the electoral register. Unfortunately I did default on a bank overdraft, I have since closed the account and settled the outstanding balance.

Just wanting to know if there was anyway I could help improve it while settling my old debts. There are 3 or 4 I can settle in full in the next couple of months and then just 2 big ones to pay back over time would this help in anyway?

Being on the electoral register will help a great deal. I would get a prepaid credit card, just so you have something positive being reported over the course of the next year, but try to wait about 6 months before making any further applications for credit (the prepaid credit card is not credit so you can do this immediately) if you've made a few recently. As far as I know it takes quite a while for the fact that you're now on the ER to appear on your credit reports anyway.

Once some of your debts are paid off, this will have a positive effect as well

The_Boss

Aside from the suggestions above, make sure you make at least the monthly minimum repayment if successful in applying for any credit. Since the interest rate will likely be sky high then you'll ideally want to pay the full amount.

Repaying on time is absolutely critical in proving you are no longer a big risk.

You-kip

Me personally wouldn't even think about improving your credit worthiness at the moment as it seems its going to Be Non-Exisistent for many years and will not improve especially with littered defaults CC'J etc.

I would just concentrate on paying back what you borrowed and find out when your defaults etc leave your credit file and a year or a couple of years before these nasties drop off then think about applying for a credit building card.

izools

As above, rebuilding your credit comes after settling your old debt. Once all the old debt is settled (and I mean all), you can then start rebuilding positive credit with a sub prime credit card and mobile phone contract etc.