Best order to improve my credit file?

ProfessorPatPending

I am hoping to improve my rating for better credit card rates and possibly a car loan (need car for work--if old car gets very expensive, something newer could work out cheaper).

Please can anyone advise? Here are the details :-

Good news: mortgage and current account up to date and at last now I have enough overtime and I have sold stuff to be able to pay off about 2/3 of my credit card debt, maybe a bit more.

Bad news: CCJ (unexplained phone bill £570) satisfied 2 years ago but still shows for 12 months from now.

Virgin cable/phone (working away in Scotland) bill defaulted £77 in 2011 because I refused to pay during a dispute (they made false promise during sales that I could downgrade at the end of the 3-month cheap deal) and I stopped fighting my corner due to family panics.

Before I started paying it off I had a mess of CCs:
Vanquis 59.9% £2,600 out of £3,000 limit
Aqua 35% £700 out of £1,600 limit
Luma 35% £150 out of £200
Capital One Classic £40 out of £100

It was a mess after family panics, a move and a car breakdown. Now, instinctively I paid the Vanquis down to less than half limit and cleared the two small limit cards. I'll probably set the two small ones' DDs to clear any balance every month, to show two more cleared accounts on my file.

But is it better (for my credit rating) to show long term efficiency by clearing the 60% card and leaving any balance on a 35% card, or to spread it so that no one card is above X% of its limit? If so, what value is X? :-)

Also, is it better (for my rating) to keep a bit of cash back, so I have a buffer and can be sure the total CC debt shows as reducing every month? Or is it better to keep borrowing as low as possible, even if it is "2 steps forward, 1 step back"?

Of course, for efficiency I should put every pound I can (maybe even using some of my free overdraft at times?) to repay the highest interest rate first and keep any debt on the cheapest card, then go for a personal loan or cheaper card to reduce the interest when I can.

Does that suggest a plan of action, please? Many thanks if anyone can advise.

P.S. 2 years ago I was over the limit and paying excess fees and I nearly lost my job. Perseverence and overtime have paid off :-)

Kim_13

Depending on balance transfer fees, I'd clear the Aqua first and then transfer as much from the Vanquis to that as you can, as you'll be paying less interest on it. Then pay off whatever's left on the Vanquis ASAP - that's a crippling rate of interest.

After that, I'd do the two small ones. Anything to get the debt off of the Vanquis first.

forgotmyname

Your CCJ stays on for 6 years from the date, Unless paid within one month.

Until thats gone i wouldnt bother applying for more credit. use the time to clear ALL those cards.

get rid of that Vanquis card ASAP... I would also get rid of the capital one card. £100 is pointless.

Use the Aqua or Luma card often BUT... pay it all back in full every month. That will improve your chances of getting credit in future.

ProfessorPatPending

OK so everyone so far is going for the long term view. minimize interest to repay the lot ASAP. Fair comment

I normally keep the small limit card for online shopping--the limit means I can't get stung badly!

Thrugelmir

ProfessorPatPending wrote: »

OK so everyone so far is going for the long term view. minimize interest to repay the lot ASAP. Fair comment

The "improving trend" will be picked up by lenders when they analyse your credit data in the future. So a course of action worth pursuing.

With interest rates that high. I'd be finding every way possible to scrimp and save to bring the balances down as quickly as possible. As short term pain will have real long term benefits.