Clearing credit card debt

Whatif

I have over the course of 5 years managed to run up a credit card balance of 10.5k on a barclaycard credit card and 1.5k on a Halifax credit card due to personal reasons. Thankfully I am now in the position of clearing them both in one fell swoop. Over that time my credit rating has plummeted as the balances grew. Could anyone hazard a guess as to how quickly my rating will recover and whether I should close both cards to remove them from my credit report so my rating improves quicker? Over the 5 years I have moved addresses a few times with my work and registered at a number of addresses, has this negatively impacted on my rating also? I'd like to think I was once again in a commanding position and would want a zero percent deal again. In general terms, are either Halifax or barclaycard likely to do that in the same accounts or would I have to close them and reapply for a new card? I have never missed a payment in my time, just paid the minimum amount for my sins. Any help or guidance would be most appreciated. Many thanks.

jonesMUFCforever

If you have never missed a payment then paying the cards off should improve your credit files in a matter of months.
You could well get deals from them both in the future.

Stuart107

Closing the card will not remove it from the credit history... it'll stay on there albeit as a closed account rather than an active one for 6yrs. If you can afford to clear the cards then doing so can only improve how the report is viewed by potential lenders.

PeacefulWaters

Pay the debts off.

Keep the cards.

Don't build up new debts.

Typhoon2000

And don't apply for any new cards, your will have paid your old ones off, you will be debt free, so just live withing your means by paying future purchases off in full every month.

uncreative

I paid off over £35k in one go thanks to a gift from parents. I had subscribed to experian, equifax and noddle to see what exactly I had and got the credit scores too. I know that they receive a lot of negative feedback on here but I took the services for 6 months just to monitor exactly what was happening with my credit files.

It took 1 month for most of the cards to register as cleared, some it took 2 months, or seems to be "cycles" of updating the CRAs once a month. My ratings were at less than half (experian was 480, noddle was 2/5 and equifax was fair i think) just prior to making the payments.

Within 3 months (ie by the third "cycle") the ratings all showed green maximum scores etc..

My score says it is a benefit to have the cards as they have been open a good 6 or 7 years. Closing them will make them as settled but as mentioned above they will stay on the credit file for 6 years anyway.

My biggest dilema now is to keep them all open or close them. I have a credit limit of over £55k that I am not sure is a good thing or a bad thing when it comes to a mortgage application hopefully towards the end of the year!

uncreative

But, bizarrely when i used to get 0% offers all the time, and i mean all the time, i got nothing for about 5 months, just the standard rates for transfers etc.. Didnt bother me as i had nothing to transfer. Only now am I starting to get offers in.

Thrugelmir

Whatif wrote: »

Could anyone hazard a guess as to how quickly my rating will recover and whether I should close both cards to remove them from my credit report so my rating improves quicker?

All you need to do is behave normally. Keep open the accounts that you intend to use\need. Close any others. Cards you use, pay off the balance every month. For major purchases either save or use a product suitable for the purpose, i.e. car loan. Then you'll be like the vast majority of the population who never have the need to check their "credit score".

What matters is how lenders profile you, nothing else.