High percentage of debt.

doginabag

I have a problem on my credit report which is stopping me from being able to get a mortgage, which is as follows.

The usage of your available credit indicates a higher risk
Having high Credit Limit Utilisation (balance compared to limit) shows that you need to use a large proportion of your available credit and you may also be having difficulty increasing this available credit.Lower utilisation is more likely to be viewed as lower risk by most lenders.

I understand why it is a problem, but my question is this.
If i were to pay off all my debt over night, would I then be able to go get a mortgage? Or would the case be that having been in that situation it would leave a mark on my credit report and continue to be a problem? And if so, for how long?


Look forward to hearing from anyone who has been in a similar position.

Thanks.

[Deleted User]

doginabag wrote: »

If i were to pay off all my debt over night, would I then be able to go get a mortgage?

No one can answer that. But you would probably be viewed as lower risk.

Thrugelmir

How would you clear your debts overnight?

EvaCustard

Thrugelmir wrote: »

How would you clear your debts overnight?

I was recently left some money so was able to do just that.

I paid off about 10k of debt (no issues with ever making monthly payments etc) and now have 1 CC on which I'm carrying a balance.

I'd like at some point to be in a position to apply for a 0% card to transfer it to.

My experian report says exactly what the OP's said. So I wonder if when the CRA's are updated next month and all my balances are zero how dramatically this will change my credit profile (I understand Experians "score" is less than useless!).

Do the lenders look at history or at a snapshot of your credit profile on the day you apply. I suppose that's a question with different answers depending on the lenders.

I'm just musing really!

doginabag

Thrugelmir wrote: »

How would you clear your debts overnight?

My debts come from my wedding. I wasn't concerned about racking them up as I knew that paying them off wouldn't a be a problem. Ok it wont be done literally over night, but in a relatively short time period (2-3 months).

But at the time I hadn't considered that maxing out cards would lead to these problems. If as soon as its paid off everything is back to good, then great. But if it leaves a mark that means lenders would still consider me too risky, then that's a problem.


EvaCustard: I would be interested to hear how it works out for you as it sounds like your are in a similar position.

bsms1147

It won't leave a mark.

dreamdreamer

I'm in a dilemma with a similar problem, will be applying for mortgage fairly soon. I have no debt but a high amount of available credit relative to my income (14k of available credit, 30k salary) and am wondering if I'm better to apply for a mortgage like this, or to close a couple of cards down. I'm not sure if having a lot of available credit looks good because I'm not using it (ergo, not in financial difficulty) or if mortgage lenders will see it and think "hmm, if she goes on a 14k shopping spree there's no way we're getting our mortgage payment..."

It's so complicated!

themull1

They would see the second scenario - i would close as many cards down as you can.!

EvaCustard

doginabag wrote: »

EvaCustard: I would be interested to hear how it works out for you as it sounds like your are in a similar position.

Well my file has update for all but about £3k of the payments I made and it's upped my "score" by about 100 points but to be honest I trust Experian about as much as I would trust President Putin so I'm not putting too much stock in that.

It's nice however to see the % of credit used reducing.

One thing that worries me now is the amount of "available" credit and how that will impact me.

I'm happy to close the accounts I've paid off but I am reluctant to bring the % back up again - if that makes sense?

missluvalot

EvaCustard wrote: »

Well my file has update for all but about £3k of the payments I made and it's upped my "score" by about 100 points but to be honest I trust Experian about as much as I would trust President Putin so I'm not putting too much stock in that.

It's nice however to see the % of credit used reducing.

One thing that worries me now is the amount of "available" credit and how that will impact me.

I'm happy to close the accounts I've paid off but I am reluctant to bring the % back up again - if that makes sense?

Hi Eva, I am registered with Equifax, can you tell me where you see the credit % ratio as I have never come across this and I am trying to get my file back on track so it would be really useful to know.

Thanks

EvaCustard

missluvalot wrote: »

Hi Eva, I am registered with Equifax, can you tell me where you see the credit % ratio as I have never come across this and I am trying to get my file back on track so it would be really useful to know.

Thanks

I'm sorry, I should have made it clear, it's Experian (Credit Expert) that show the % - I don't think Equifax do.

As an aside, Experian rate me as very poor while Equifax rate me as good.

I'm pretty sure their opinion is worthless but it's crazy that both are supposed to provide the same info ie accurate reflection of your credit history but they don't agree on where that puts you on the imaginary scale.