Paying off defaults and repairing credit file

littleworkerbee

Hi
I have two defaults which I'm hoping to have settled within the next two months( I know the defaults won't drop off until 6 years following the default date though)
This will then leave me with one small credit card (Capital One) which I currently pay the minimum payment on, and the usual mobile phone contracts., but

I had a couple of questions I hoped someone could answer for me:

1. Does your credit rating start improving from as soon as you settle the defaults, assuming you keep your remaining credit in good order? And does it matter much if one of the defeults is partially satisfied instead of fully satisfied?

2. In terms of repairing my credit file, is it better to pay the minimum payment regularly, or clear the balance regularly, on the credit card? (limit is only £200 so can clear monthly if need to).

3. Would it also benefit me to get a pre-pay/credit builder type card and use this as well as my Capital One credit card?

4. Are there any other good tips for improving credit fairly quickly despite the fact defaults are on there until around 2017?

5. I am hoping to be able to apply for a mortgage and wonder how long I'd realistically have to wait until the high street might accept me? My bank (Santander) told me 3 years from when the default is paid off, but wonder if any other high street lenders have different rules?

Thanks so much for any advice

JKSandy

1) The older the default becomes the less impact. However paying it off even partially is better than not paid.

2) Pay in full

3) No

4) Manage your existing accounts well and don't have any late payments

5) Wait for the defaults to drop off your file, you could possibly get a mortgage with defaults however you would be paying sub prime interest on it

Tixy

1) it will look a bit better once the debts are settled - but obviously still not great. If you were hoping to get a mortgage before the defaults had dropped off then it would probably be better to settle in full if you can (if you are not applying until they dropped off then would make no difference)

2) better to always pay more than the minimum, ideally clear in full each month

3) as you already have a card I wouldn't bother with the creditplus prepaid card.

4) only the obvious to pay everything on time going forward, don't breach limits etc. Ensure you are on the electoral roll all the time (or get on as soon as you can if you move).

5) may be worth asking either on the mortgages section of this forum, or approaching an independant mortgage broker with a copy of your files once they are paid off.

littleworkerbee

Thank you very much for your replies :-)

Stuh

I am also looking for a mortgage later this year and both my defaults will drop off in June 2014 however there are 5 creditors left with a total of £20K a family member can help me with 7K to try and settle all of them will this have a major impact on my mortgage application please? I am asking as i have just spoken with RBS and they said it will!! aarrggh any advice appreciated thanks