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Does paying off all your debts help credit rating sooner?
Stressed_Dad
Posts: 29 Forumite
Hi Everyone
After overcoming health problems i have been able to chip away at reducing my £25k debt (joint with wife).
We are in the process of selling our house as our mortgage interest rate has risen and renting will be cheaper until our credit rating improves and were open to 'normal deals'.
I have been advised to make reduced offers for the individual debts around 60-65% and wait to see what the debtors/collection agencies say, if its a yes then our debt could be paid off at around £16/17k approx.
We have around 3 or 4 CCJ's and numerous defaults (for the past 3 years), we are aware that a credit history of this type would mean around 6 years in the wilderness for decent mortgage offers.
What i would like to know is if we did pay off the outstanding debt in the next couple of months would this speed up the process of being able to get a decent mortgage rate again in much less than 6 years or are we better of using the money in a savings account and sticking to our current agreement (all of our debtors are now frozen and interest free).
If anyone has been in a similar situation or if someone can advise me then i would be grateful.
I know martin is always in favour of paying off debtors if your able to but as i said the debts have had the interest frozen and were worried we wont have enough money left in a few years for a decent deposit for a house.
Please help
After overcoming health problems i have been able to chip away at reducing my £25k debt (joint with wife).
We are in the process of selling our house as our mortgage interest rate has risen and renting will be cheaper until our credit rating improves and were open to 'normal deals'.
I have been advised to make reduced offers for the individual debts around 60-65% and wait to see what the debtors/collection agencies say, if its a yes then our debt could be paid off at around £16/17k approx.
We have around 3 or 4 CCJ's and numerous defaults (for the past 3 years), we are aware that a credit history of this type would mean around 6 years in the wilderness for decent mortgage offers.
What i would like to know is if we did pay off the outstanding debt in the next couple of months would this speed up the process of being able to get a decent mortgage rate again in much less than 6 years or are we better of using the money in a savings account and sticking to our current agreement (all of our debtors are now frozen and interest free).
If anyone has been in a similar situation or if someone can advise me then i would be grateful.
I know martin is always in favour of paying off debtors if your able to but as i said the debts have had the interest frozen and were worried we wont have enough money left in a few years for a decent deposit for a house.
Please help
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