Defaults... and getting credit 6 years on.

ysammy8

Hi All

I have about 8 defaults on my credit file due to poor management of my finances, however it's nearly 6 years on and I could really do with getting a loan to cover all of these bad debts which I am still paying off, I have arrangements in place with the creditors.

All of these defaults are due to expire by next christmas i.e. have been on my credit file then for 6 years.

What happens to my credit report/rating/score once they have reached the 6 year mark and will I be able to get a loan say £25,000 for repaying my debts?

I already have an aqua and vanquish card all up to date, had them for a year now. Also have a mortgage which is always up to date it's a joint one.

and finally any suggestions?

thanks in advance!

Tixy

Once you reach the 6 year anniversary of any default the default and the whole record of the debt will disappear from your credit file.

If you then apply for a loan of £25k you will still need to detail the outstanding debts on the application.

Whether you would get accepted for a £25k loan at that time would depend on how a potential lender assesses your finances/outgoings, your income and your credit file at that stage.
But assuming that is a sizeable loan, assuming you plan to borrow unsecured then you'd likely need to be a high earner to be considered for such an amount.

How long are you expecting it to take from now to repay this £25k debt (if you continued paying the existing creditors)?

Eonel

After 6 years the Credit Reference Agencies will stop reporting your defaults. As long as there has been no other significant missed payments or arrangements to pay in the interim, then your credit history will be "clean".

As a rule of thumb, you can borrow unsecured up to 50% of your salary - this includes all types of loans + credit card limits.

You are looking to refinance 25k of debt. Lenders will effectively credit check you for 50k of debt - the original + the refinanced amount as to them there is no guarantee that you will use the new loan to pay off the old debts.

By the rule of thumb, you will have to earn 100k before lenders will consider you for that amount of total credit.

ysammy8

Let's say i'm earning £40,000 p/a

25k was too much as an example, could I borrow say, £10 - £15k?

And how soon after the defaults are gone?

Ideally i'd go with my personal bank as they know I/O

Eonel

Approaching your bank is the best place to start - but no-one can tell you exactly how much they will lend - it will depend on their lending policy at the time & your circumstances.

By the rule-of-thumb, you could borrow 10k to refinance other debts of 10k - temporarily taking you to 50% debt vs salary.

You can apply the day after the last default drops off your credit record. Just make sure your personal bank isn't one of the previous institutions you had defaulted on.