Debt - paying off in full - how long to rebuild?

sillyspendy

Hi Guys


I have the following debt:


Vanquis - 2150
Aqua - 1500
Capital 1 - 750


I am paying all of this off next week.


My question is my current rating is very poor due to missed payments and the amount of debt I have being maxed out. I have been saving hard and can now pay it all off. How long until my rating should improve to at least fair?


Thanks

Westminster

Your rating is subjective really so it depends on what you are looking to achieve.

It greatly depends on the details - specifically how far down the process of debt collection you reached with each account (i.e. whether they issued defaults etc)

If you are settling the balances in full rather than a partial settlement then this will go in your favour.

sillyspendy

It will be paid off in full.

I have had missed and late payments but no defaults (the ones you get when you miss three or so in a row payments).

Therefore I know it will take a long while to recover but hoping it reflects positively within a year.

uncreative

The full answer is 72 months which is how long the CRAs record the green ticks or otherwise, but mortgage lenders like Precise Mortgages allow late payments once they are 12 months old.

I would say that you need to give yourselves a 12 month window anyway to get using a budget PROPERLY and save like mad. A 12 month pattern of regular saving, living within your means and money in the bank is a real boost to getting a mortgage. You shoudl seriously consider not getting more debt in future. We changed our car and rather than go for the usual high end new car we got a second hand one that trade in plus cash means we dont have any car payments. Who cares what car you drive?? It's crass to talk money but when we inevitably got some comments about not getting a new M class jeep we told our friends that we have no debt whatsoever and live within our means - you should see their faces drop.....