Debt, payment plans & a default

ThierryHenry

Hi guys,

Seeking some information. Brief outline to my financial life:

Now 26, had credit cards all my life. Pure greed to start with. I then went to the south of England to go to University and was always up against it having had credit before going.

Started taking out pay day loans, paid them back all fine.

2011 I took a loan from Santander for £3000 while I was at Uni and missed payments after a while. Eventually they passed the debt on and issued me with a default notice.

Summer 2012 I lost my job (through no fault of my own)having left university after graduating and ended up moving a few times. I had a few payday loans at the time for small amounts. I had payment plans in place and paid them off. 1 was passed over to an external debt collection company.

I took a loan from a guarantor loan company last year to try and get back on track with arrears on credit cards (2) and bills. This has (and hope to continue) to be paid back without any fuss.

Since the turn of the year I have had the misfortune of unexpected bills and the only place I could turn to was payday loans to keep up. It has all come to a head and I have had to raise the white flag and organise payment plans for these three.

To sum up, I took loans, due to unforeseen circumstances I couldn't pay them back on time. I am determined to pay them ALL in FULL (as I'm not looking to shirk the debt). I have also got a partner who would like to buy a house in time but I need to know when I realistically could without being embarrassed with straight rejection because of my credit file.

I have 1 default issued in May 2013 and the most recent payment plan was set up this week. The only positive is that they will all have 'settled' next to them by the end, and for purposes of this post, let's assume I will pay back the Guarantor Loan without any problems.


My questions are:

1) How much of a positive effect will the Guarantor Loan have on the credit rating?

2) How would a person in my position go about raising their credit file?

3) To my understanding, defaults and payment plans stay on a credit file for 6 years. Is that from the day you took them? Organised a repayment plan? OR from the last payment?



For anyone who has got to the end - thanks for reading. Any advice would be great, good or bad.


Cheers.

thebritishbloke

1) If you've not missed any payments, it will help.
2) Pay off all your debt, then have one credit card and pay it off in full every month.
3) It's from the last payment.

You're very unlikely to get a mortgage until all of these drop off of your report, so you might be waiting a while (until you've paid off your debt + 6 years)

rizla_king

3) If defaulted its 6 years from the default date.

ThierryHenry

Cheers. See I was previously advised (rightly or wrongly) to steer clear of credit altogether for the six years?

Annoying that it's sex years after the last payment.

Appreciate your reply.

ThierryHenry

rizla_king wrote: »

3) If defaulted its 6 years from the default date.

Thanks. That's more positive. But for payment plans it's six years from the last payment?

rizla_king

If defaulted its always 6 years from the default no matter what payment plan you have. If they never defaulted it THEN its 6 years from when you settle it.

ThierryHenry

rizla_king wrote: »

If defaulted its always 6 years from the default no matter what payment plan you have. If they never defaulted it THEN its 6 years from when you settle it.

Thanks for clearing up - much appreciated.

ThierryHenry

The other question, (which I understand has no definitive answer) is after that default has dropped off and the payment plans are in the distant past c4.5 years, then would I even be entertained for a joint application with a partner who's a solicitor with a squeaky clean record and years of mortgage payments behind her?

Thrugelmir

ThierryHenry wrote: »

then would I even be entertained for a joint application with a partner who's a solicitor with a squeaky clean record and years of mortgage payments behind her?

The impact is on her not you.

As it's your record that will come under scrutiny. The sooner that historical issues are resolved, the sooner you'll be considered. The larger the deposit you are able to put down the greater the number of doors which will open.