credit score improvement...

krazyhorse

Hi guys...

My credit score is shocking, last time I checked it was 380 something (apProx 3-4 months ago).... This is due to having £16k in debt and being with a debt charity since 2010....

My plan is to sell the flat we currently live in (which has no mortgage on it because I inherited it with mortgage paid off) for e.g. £190k.

As we live in a very compact 2bed flat, boy and girl both under 3yrs old I'm looking at 3bed house shared ownership. Reason being I'll have £190k-£16k equity (£174k equity hypothetically). So I'm looking to get around 70% of a shared ownership then rent the remaining 30% until I can get a mortgage to buy it out.

My real question to you guys is.... Once debt free... How long would I have to rent the 30% before my credit file improves and/or a bank is happy to give me mortgage?

Thanks

You-kip

You can't improve your Credit score as there's no such thing, what you can do is improve your credit worthiness which is paying your debts back on time and lower your debts the best you can.

gb12345

First off, ignore the credit scores, they are just meaningless random numbers that only you and the credit reference agency get to see - they are not seen by the lenders you apply to.

What you should be focusing on is the number of red items (defaults, missed payments, CCJs etc) that are showing on your credit history.

Secured lending is underwritten totally differently to unsecured as the lender always has the fallback of reposessing the security if you fail to pay. You are looking for a very low loan:value percentage, so the risk for lenders will be very low (reposessing and selling at auction would more than cover their losses).

It might be worth talking to a mortgage broker (or posting in the mortgages forum as there are a number of them who post in there). Tell them what is on your credit report and see what they think of your chances.

krazyhorse

Thanks guys I'll ask over there...