Credit score after defaults

garethw08

I am going to be debt free on the 25th of this month (best day of my life)

Just wondering wether after my defaults and CCJ are 'settled' will my credit score start to rise like everyone elses or will it be capped at a certain score until the defaults drop off my file?

Free_queen

Defaults will be shown as either satisfied or settled and will drop off credit file after 6 years from the date of default which should be shown on your file for each creditor. There is no other way of removing them earlier. Therefore if the creditor only gave you a default last year then this will stay on your file for another 5 years. Creditors are very good at waiting 4 years before defaulting a long time after reaching payment agreements with them and by doing this they are effectively messing up your score for 9 plus years. However, all loan companies etc., have their own criteria when assessing your credit score and so may either choose to ignore defaults of 2 years or more old and it will look more favourable if they are shown as either satisfied or settled.

Free_queen

Also forgot to mention that a CCJ is no worse than a default and from experience the sooner you get a CCJ, then the quicker your file will be back to normal. The only disadvantage of a CCJ to some people is that they are prevented form applying for certain jobs and so this is another tactic creditors use to frighten people! It is not a criminal offence to be in debt and you will not go to prison unless you have deliberately made a fraudulent application for credit!

Tixy

If by credit score you mean the score that the credit reference agencies will sell to you then there are instances of people reporting being given a 999 credit score whilst they still have defaults visible on their credit file. This does not mean they found it easy to get credit though, as a potential lender judges the information on your file not a score.

In terms of your ability to get credit then once the defaults and CCJs are showing as settled it will start to get easier to get accepted for subprime credit.
You are unlikely to be accepted for the very best mainstream deals with defaults/CCJs still visible on file, but the older they get the more likely you are to get accepted by some lenders.

garethw08

Thank you both so much for your replies. Not that it matters as debt is debt but the CCJ is only for £100 and the defaul for £300 which will both be settled this month. Will not be applying for any credit for atleast 18 month where I hope to get a mortgage with a 20% deposit

longtermplanner

garethw08 wrote: »

Will not be applying for any credit for atleast 18 month where I hope to get a mortgage with a 20% deposit

You still have some credit commitments I hope? If not then you need to get some, you need 18 months of good payment records on your file.

This could be a mobile contract if you have one. Or a credit card which you use and then pay off in full each month. Try Vanquis - horrible interest rate but they will take people with a bad credit score.

garethw08

Yes I've got a mobile contract which is paid in full every month and also got a cash plus credit builder card which I got last month so I'm hoping this will sort me out now once my debt is cleared. Can't wait to be able to say I don't owe anyone a penny. Recently qualified in my job after doing my apprentiship so the future is looking good. I don't ever plan on going in debt again... Except for a mortgage which I'm hoping there will be somebody who will take me on in 18 months time. Fingers crossed

National_Debtline

Having ongoing commitments which are paid on time will be really beneficial here, your credit 'score' will improve over time. It's important to bear in mind that lenders use a wide range of criteria when determining whether or not to lend to someone - a credit score would only be part of it. When it comes to seeking a mortgage do ensure that you seek help and advice from a decent mortgage broker.

Very best wishes,

David @ National Debtline

garethw08

Thanks you David. Yes I will be trying to find a decent broker when the time comes. I think I tick the other boxes such as current account always in credit, no overdraft, been with employer 5 years etc so will spend the upcoming months on here reading about people with a situation similar to mine. Looking forward to building my deposit up aswell