Building a good credit history

r0wly86

Hi all

Got in a debt spiral which essentially culminated last year in 2 defaults (which have now been satisfied). I am now in the process of trying to rebuild my credit history. I understand that after 6 years the defaults fall off. But how long roughly (I know each case is different) will I see an upturn in my fortunes. I have no debt and one credit card with a £200 limit that I spend £50-60 each month and pay off in full. No other credit other than a mortgage that is impecable in its history.

And out of interest my partner was looking at an Amex card and it said the entry requirement was no history of bad credit. Would that mean in 6 years after the defaults have gone and my credit history suffers no other mishaps would I still have a history of bad credit?

And finally I once several years ago took out a pay day loan for £60 paid off in full, I read on MSE that mortgage providers don't lile pay day loans. Will this stay on my history as it was paid or does this drop off too

[Deleted User]

The PDL will drop off after 6 years as well.

Maintain your credit card usage of spending and paying in full and you will look more attractive to lenders over time.

Malmo

But how long roughly (I know each case is different) will I see an upturn in my fortunes.

The older the defaults become during the 6 year period from default registration date, the less of an impact there will be, but there is no rule of thumb here and it depends on what your future credit requirements will be (for example, a mortgage application will be treated differently to a credit card application).

I have no debt and one credit card with a £200 limit that I spend £50-60 each month and pay off in full. No other credit other than a mortgage that is impecable in its history.

You are doing the right thing and the credit card repayments should contribute to a history of responsible borrowing.

And out of interest my partner was looking at an Amex card and it said the entry requirement was no history of bad credit. Would that mean in 6 years after the defaults have gone and my credit history suffers no other mishaps would I still have a history of bad credit?

Once the defaults drop off from file at each credit reference agency, they are gone and won't be a factor that lenders can consider. Before applying for a card, review your chances of being successful in your application by using a Credit Card Eligibility tool, such as the ones provided by MSE. The tools only perform a type of "soft" search on your credit file, so the search won't be visible to anyone other than you.

And finally I once several years ago took out a pay day loan for £60 paid off in full, I read on MSE that mortgage providers don't lile pay day loans. Will this stay on my history as it was paid or does this drop off too

Credit Reference Agencies hold up to 72 months (6 years) worth of history, if the lender chooses to report the data to 1 or more agencies. Beyond this period, the data will drop off.
Generally, payday loans are not a positive for mortgage lenders and how they are viewed and treated depends on the lender's criteria. A handful of mortgage lenders may auto decline any application where there is payday loan activity visible in the last 12 months, but other lenders won't. An independent mortgage broker's guidance would be advisable in this scenario.