Most impactful way to pay debt?

iamparakeet

Not me, but let's say you had a £6,000 loan - a figure which has been consolidated from other historic debts - plus a poor credit rating.

Now let's say the funds were available to pay that off in full.

Are there particular ways to wipe that out which would be more impactful on the credit rating than others? eg. One lump sum, Several payments, By debtholder, By AN Other etc?

The priority is just to get rid of it, but curious if there are ways to maximise that effect.

Thanks.

Pixie5740

A credit file won't show who has paid off the debt, just that it has been paid off...or not.

The loan is always accruing interest so it would be best to pay the loan off in full. Drip feeding the loan when you have the money available to pay it off in one go makes no sense. The £6,000 in savings won't be making as much interest as the £6,000 loan is costing you.

Tracey52

Hi,not sure if this helps,but I had various debts being paid off slowly through Payplan, recently won over £4000 through PPI claim so although this wasn't full amount needed to completely clear debts I managed to get some good settlement figures from my creditors and have now settled all debts, this has had an impact on my credit record but not as bad as I thought it would be, although I'm not looking to get credit again anytime soon so can wait the few years needed till its properly clear again. Personally I would agree that if you have the funds to clear your debts its always best to do so and have a clean slate, good luck x