Debt free for well over a year.... now what?

CloverHeart

My husband and I came into some money (well I say came into - PPI credit insurance repayments) and cleared every last bit of debt we had incurred.

Husband is thhe main breadwinner and is on enough to support us plus our child.

I am now in a position where I have a fair credit rating and I would like to start building my rating back up properly. I am unemployed, a student and (pregnant with second child) will be taking a years "Maternity" before going back into education....but where do I start?

Do I look at getting a credit card? Small overdraft? Should I (or will i even be able to) start while I am in this situation? I really am clueless when it comes to credit and this got me into trouble the first time round, so would like to avoid it this time round without risking my future ability to get a mortgage (we rent right now).

Tixy

Do you have any active credit accounts showing on your credit files at the moment?

A credit card, used responsibly, is a good way to build up a positive credit history and demonstrate your ability to use credit sensibly. If you were able to get a card then use it for a couple of transactions in the month and repay in full when you get the statement.

But if you are unemployed you may struggle to get a card at the moment.

BillJones

CloverHeart wrote: »

I am now in a position where I have a fair credit rating and I would like to start building my rating back up properly.

I'd suggest changing your emphasis as a fiirst stepp. Building up your credit rating sounds as though you are preparing to take on debt agaiin in the future, when you are able.

Although the actions may be the same, would you not prefer to start ensuring that you never need to borrow again, or that it will only ever be a mortgage?

Yes, use a card and pay it off in full each month, if you want, but I'd also suggest that you take everything that you were putting towards your debts and start saving it, either for a rainy day, for retirement, or to put some (not all) of it towards Christmas and holidays.

You have a great opportunity to work towards proper financial safety and stability now. It'd be a shame to use it as a route to go back down the road that you've just left.