What to do once defaults disappear

Gonzo1987

So, looking into my horrendous credit score, I see my defaults will all drop off by Nov 2016.

I've got 2 outstanding debts which I'm paying off and will clear by then.

I'd like to use these 2 and a bit years of rubbish credit to save for a mortgage for a shared ownership property, but once the defaults have gone what is the best thing to do? I won't have any credit in the form of borrowing money, just insurance etc which i pay monthly, and mobile and other bills.

Do I save save save and apply staight out for a mortgage (and can i do this right after the defaults have dropped off?) or do i need to be looking longer term, say in 3 years time apply for a mortgage but get some form of credit and use it responsibly in the mean time?

Tixy

Mortgage lenders do like to see some evidence of managing credit. You might want to see if you can get accepted for a subprime credit card at some point (which may still be possible even with the defaults on file).

If you could then you can then use for some general spending and repay in full each statement. Hopefully then by the time the defaults drop off you will have a year or so clean repayment history with a credit card and so will be in a better position to apply for a mortgage soon after they have dropped off.

djik1974

I have a default registered by Scottish Power in 2010 which I was unaware of. I am struggling to get hold of anyone in the company after they closed my complaint this week. In the complaint they advised I contact a company called First Locate who had the debt. They have confirmed both verbally and by email to me that this debt was recalled by Scottish Power on 8th Feb 2010, 11 days after the default was raised. Both and I and Call Credit (where it is registered) are struggling to get any response from Scottish Power. Even the debt company state Scottish Power should not be showing this as a default. The only way I found out about it was going for a mortgage. If anyone can help, please do so as we will shortly lose the house we are trying to buy if we can't get the mortgage through. For the record my Experian credit rating is high and no defaults have ever been registered on either of the other agencies!

Gonzo1987

That was another option i was considering - one of the cards with a higher APR?

I've learnt so much and there in NO way I'm getting in debt again, I'm just worried about applying for one of these cards to be turned down. Is there one that is more likely to accept someone with a worse credit score?

MrSilk

Apply for Capital One Classic, if you don't get approved they'll offer you their Secured card, to which you'd be required to pay a deposit of either £49 or £200, for a £200 credit limit.

Tixy

djik1974 wrote: »

I have a default registered by Scottish Power in 2010 which I was unaware of. I am struggling to get hold of anyone in the company after they closed my complaint this week. In the complaint they advised I contact a company called First Locate who had the debt. They have confirmed both verbally and by email to me that this debt was recalled by Scottish Power on 8th Feb 2010, 11 days after the default was raised. Both and I and Call Credit (where it is registered) are struggling to get any response from Scottish Power. Even the debt company state Scottish Power should not be showing this as a default. The only way I found out about it was going for a mortgage. If anyone can help, please do so as we will shortly lose the house we are trying to buy if we can't get the mortgage through. For the record my Experian credit rating is high and no defaults have ever been registered on either of the other agencies!

You really need to post on a new thread so that people can see your query separate to the one by the opening poster.

Did you have an account with scottish power?
did you get behind with repayments or do you believe that you never defaulted?

If they have responded to your complaint but not to your satisfaction then your next option would be to make a complaint about them and their entries on your file to the ICO.

Tixy

Gonzo1987 wrote: »

I'm just worried about applying for one of these cards to be turned down. Is there one that is more likely to accept someone with a worse credit score?

This thread gives some information that might be useful http://www.moneysavingexpert.com/credit-cards/bad-credit-credit-cards and on the various cards it indicates who is likely to be accepted in terms of defaults/CCJs etc.

If you apply and are turned down then I would wait a few months and try a different provider.

Gonzo1987

oh wow - thanks, I think I just got approved for the capital one classic. Amazing! Things are looking up - so if I just use it for my online food shop and pay it off every month this will help when the defaults drop off, and I can continue to save for a deposit. Yessss. Years of hard work seem to finally be paying off. About 2 years ago I couldn't even get accepted for a mobile phone contract!

Tixy

Good news. Yes make sure you wait until for the statement each month and then pay in full.

Gonzo1987

Gah brilliant, I am so excited :-) is it better to pay by DD or make a manual payment each month, or does it not really matter ?

Tixy

Depends how organised or how forgetful you are! I always have a DD set up.

If you do set up a DD then be careful the first month to check whether it is set up in time and if not make a manual payment. Last thing you want is to miss a payment on this new card.