Credit Rebuilding Advice, please

SMRS

Hello,

I've been trawling these forums for months now and thought I should post to see if I can get a little help. Myself and my partner are hoping to buy a house in the future but I wanted to find out whether this is ever going to be possible.
I (foolishly) have 2 defaults and a CCJ on my file equating to around £4000 from 2013/2014. I'm in quite a well paying job now, as is he, and I'm wondering whether to contact the companies to begin paying them off or wait for them to drop off of my file. If they are marked satisfied will this benefit me in the future when applying for a mortgage? Also, should I contact them to update my address details in case the defaults turn to CCJs?
I am unable to obtain any credit at all which means I am struggling to even attempt to rebuild my credit but we are working very hard to keep his credit file looking good even though he has only been in the country a year. We are on the electoral roll, he has a credit card which we pay off every month and 2 phone contracts which we keep up to date.
What I am trying to work out is whether we are ever going to be eligible for a mortgage and how much damage I have done by being so foolish over the last few years.

I would appreciate any advice. Thank you.

matttye

I would say pay everything off as soon as possible. A mortgage lender will take into account an active CCJ and the fact that the lender could enforce that debt by whatever means are available to them e.g. A charge on your new house. It may be frowned upon that you're using money for a deposit which you could use to pay off the debt as well.

Bear in mind that, like you said, the defaults could become CCJs if you don't pay them. Generally speaking companies aren't interested in trashing your credit file, they just want what is owed, so if you contact them and arrange repayment of the debt they shouldn't proceed to court.

Adverse information gets less serious over time, for example, I was able to start getting mainstream current accounts when my defaults were about 4 years old. It's difficult to say if the fact that mine were satisfied had much of an effect, but with regards to a mortgage I would say it would definitely have an effect. The reason being that they will take into account debt as part of the affordability checks on you.

SMRS

Perfect, thank you. I think it is just time to bite the bullet and begin to pay them off. What about the CCJ? Is it worth paying this off too? In regards to paying them off, am I better off paying directly to the company bit by bit rather than going through debt consolidation?
Thanks again.

matttye

SMRS wrote: »

Perfect, thank you. I think it is just time to bite the bullet and begin to pay them off. What about the CCJ? Is it worth paying this off too? In regards to paying them off, am I better off paying directly to the company bit by bit rather than going through debt consolidation?
Thanks again.

You can do a self-managed DMP or use a free debt charity like Stepchange. Avoid fee paying companies like the plague, as every time you pay them a fee that's money that could be going off your debt. There are some horror stories about fee paying debt management companies going bust with some debtors losing thousands of pounds which the company had not passed onto their creditors.

The advantage of going with a charity like Stepchange is that they have a lot of experience in dealing with creditors, may be able to freeze interest etc.

You should definitely pay off the CCJ too. When the court granted the CCJ did they order you to pay a certain amount regularly? If so, you should stick to that or go back to court and ask them to vary the judgment if you can't afford what has been ordered. So long as you stick to the judgment terms the creditor will not be able to take enforcement action.

SMRS

Thank you for replying again. I am not sure what happened with the CCJ as I was out of the country when it all happened and only found out about it once the court date had passed. I am going to contact the court to find out more details about it in order for me to pay it off. Thank you for your help about the Debt Management charities, I will check them out now.