Improving credit score to apply for a mortgage

dedwards7

Hi all,

Im a new member, so please be gentle! I apologise if im asking the same question as everyone else...

Let me give you an overview, I have checked my credit file using noddle, I currently have 5 defaulted accounts and 1 ccj.

The earliest these accounts will "drop off" my file is summer 2016 (the Ccj) the others vary upto 2020.

I am very keen to get these accounts cleared as I would like to apply for a mortgage in about 3 years time.

I have contacted my creditoers and I am currently negotiating full and final settlement offers on the defaulted accounts. And im looking at paying the ccj in full also.

My main question is this " once I have paid all my defaulted accounts, how long will it take for my credit score to improve sufficiently to apply for a mortgage?"

Candyapple

You'll need to speak to a mortgage broker closer to the time as no high street lender would offer you a mortgage with that many defaults and a CCJ and you would also need a larger than average deposit.

Your credit rating won't improve at all I'm afraid until all the negative data has been removed, however as a very rough guide of thumb, a few lenders don't view a default as harshly once it is 4 years old, but this would be in relation to credit cards, for mortgages you would want them to be as old as possible and with a history of other repayments all up to date and no debts.

Thrugelmir

dedwards7 wrote: »

My main question is this " once I have paid all my defaulted accounts, how long will it take for my credit score to improve sufficiently to apply for a mortgage?"

With F&F settlements. Years rather months.

After all the same finance houses you are defaulting on. Are unlikely to wish to immediately lend you thousands of pounds. When you've made no attempt to pay back what you already owe.

If you sow nettles then that's what will grow,

dedwards7

Hi,

Thanks for your replies.

I realise its going to take years to repair the damage... Im setting myself a time range of about 3 years, I will have all the defaults and ccjs cleared by the end of 2015. So in effect I will then have 2 years to try and improve my credit history/behaviour.

Does this sound like a workable plan?

Candyapple

When you say cleared, do you mean they will drop off your files by end of this year or that you will clear the balances owed?

When you are aiming to apply for a mortgage, how many defaults/CCJs will remain?

All you can do is within whatever timeframe you've got is clear all debts and save hard, and make sure if you have any cards/loans etc that all repayments are up to date.

solentsusie

dedwards7 wrote: »

Hi all,

Im a new member, so please be gentle! I apologise if im asking the same question as everyone else...

Let me give you an overview, I have checked my credit file using noddle, I currently have 5 defaulted accounts and 1 ccj.

The earliest these accounts will "drop off" my file is summer 2016 (the Ccj) the others vary upto 2020.

I am very keen to get these accounts cleared as I would like to apply for a mortgage in about 3 years time.

I have contacted my creditoers and I am currently negotiating full and final settlement offers on the defaulted accounts. And im looking at paying the ccj in full also.

My main question is this " once I have paid all my defaulted accounts, how long will it take for my credit score to improve sufficiently to apply for a mortgage?"

So you want to apply for a mortgage in 2018?

The CCJ is six years old in 2016 so will be history and off your file. How many defaults will be left that will be less than six years old in 2016? This is what you need to look at. How many will still show on your file still in 2018?

In the meantime you really need to keep any credit accounts you still have squeaky clean and ensure all payments are made on time. Work on improving your file as much as possible by not getting any late payment markers.

dedwards7

Hi. Looking at my file, I will have at least 2 defaults on my account in 2018, although these will be paid. Im planning on getting these paid first, my theory is it will look more favourable if I paid them years ago as opposed to months ago.

Ive heard that if the defaults are settled and older than 4 years, then this again works in my favour... Anyone know if this is true?

solentsusie

dedwards7 wrote: »

Hi. Looking at my file, I will have at least 2 defaults on my account in 2018, although these will be paid. Im planning on getting these paid first, my theory is it will look more favourable if I paid them years ago as opposed to months ago.

Ive heard that if the defaults are settled and older than 4 years, then this again works in my favour... Anyone know if this is true?

The older the default becomes the less significant it is. If you can wait to get a mortgage until after they have disappeared off your file, paid or not, you will be in a much better standing to get a mortgage at a decent rate.

If you have any defaults at all you will extremely be pushed to get a mortgage from a main high street lender and would be advised to go through a broker.

Keep your file as clean as you can and never miss a payment in the meantime. Also if you are planning to apply for a mortgage get your borrowing down to a minimum.

Good luck.