Can paying outstanding debts build my credit score?

broccolihead

Hello,


1st post on here so apologies if I'm in the wrong place etc...


To cut a long story, after falling in debt due to a marriage breakdown (being screwed over ) then the credit crunch and losing my house...I'm now in a position to start to repay my £75k of debts. Played with going bankrupt, but it would have had implications on my job...


Anyway, after a change of jobs and a healthy salary rise I can now start to repay my debts.


Question is...my credit rating was zero, if not in a minus figure...by starting to repay my debts in regular monthly payments, does this start to repair my credit score? or do I have to wait until they are all paid off before it starts to repair...


thanks in advance for any help or answers.

sinizterguy

As you debts reduce, your credit rating should improve.

But if you have a LOT of debt, then it may take a while to get to a point where there will be improvement.

There is also another point, where reducing further will have no real effect.

It is quite difficult to give you a precise answer.

But, look at it this way. Companies are more likely to lend you more money (mortgage/card/whatever) if you have a manageable amount of debt.

broccolihead

Thanks sinizterguy,


I'm not looking to borrow or take credit in the meantime so appreciate your answer.


Was more out of interest that by making regular payments to reduce them would start and help to repair and rebuild my credit rating allowing borrowing again in the future.

stator

If you meet all the payments on your debts then your file will start to improve but if you have lots of outstanding defaults or CCJs it will be a long time before anyone will lend to you.
If the debts are unamangeable you should consider a repayment plan / settlement but that won't look good on your credit file.
Have you spoken to any of the debt charities / citizens advice?