Trying to fix my credit

Mike1985

So as par for the course - I have poor credit. I am trying to build it back up and have a 2 yera plan to achieve not only a deposit but also some extra cash to go to Florida and also buy a car for a few thousand.

I have some real horror stories on my credit file -

CCJ - £2770
2 x Defaults (which are old student debt which is statute barred now - but I intend to pay, they seem to have rolled round each month which is a bit shocking)
Late payment paying back payday loans

I intend to clear the payments for the defaults within 2 months, they will then be settled.

The CCJ is dated to expire on jan 2018 - which coincides with when I will have the funds to apply for a mortgage. The question is - do I settle this by paying £115/m or do I just let it expire?

If I have a positive credit file, with a credit card and a car finance plan (about 1 year I want to apply for this with a large deposit - just to earn some credit back)

In 2 years with the CCJ & defaults satisfied - will this be worth applying for mortgage? I know there are higher rates - which I can afford to pay back up to £800/m for repayment. I will also have a deposit of £14000 of which I would need only £7500 with the government help to buy scheme of 5% required on my behalf.

I realise things will change in those 2 years but if I can do everything I can to repay and sort out the situation, will any lenders come near me once these have been resolved - or is it going to be 6 years on from when the defaults are cleared?

National_Debtline

Mike1985 wrote: »

The CCJ is dated to expire on jan 2018 - which coincides with when I will have the funds to apply for a mortgage. The question is - do I settle this by paying £115/m or do I just let it expire?

Hi Mike


The risk with leaving the CCJ "expire" is that at any time, the judgment creditor can apply for enforcement in the event of non-payment. This would not "refresh" the CCJ on your credit file, but it would have implications for mortgage affordability checks if, for example, the creditor sought an order to deduct payments from your wages.


It is up to you whether you treat this as a calculated gamble. If you are able to repay the CCJ without affecting your existing plans to seek a mortgage in two years' time, this might be the safer of the two options.


Dennis
@natdebtline

Mike1985

Thanks for the reply,

I intend to pay £115 a month to clear it, this would take me up to the time just before it is about to expire. What I would like to do is see if they will accept part payment and work out a plan as I do not currently have the fee's to pay it off.

I have noticed that one of the defaults will clear in 10/7/2016 for £736 - I am looking to clear this, but is the gamble worth it to let it expire and if they come at me with a threat of CCJ then to clear it, but otherwise ignore it?

I dug myself into a hole badly living on my own, on a poor wage and fresh from student days I didn't earn enough money to live let alone pay debts, but now I do earn enough but I plan on paying my debts off.

The defaults on my file worry me more than the CCJ. Which i was never notified about - despite being on electoral roll they contacted me at my mothers house, which I had not lived for years. They even sent some guy with a "package" to be signed for - which I spoke to over the phone and said to open the package and tell me what it was as I had not ordered anything and he then decided to come back when I was available - I couldn't believe him! Turned up to deliver a "package" about a mobile phone size at about 7pm to my mothers house trying to catch me - despite not being notified and change of address being made loud and clear!!!

National_Debtline

Hi Mike


Sorry to be slow in replying - I do check for responses but I must have overlooked yours initially.


If I understand your question about making "part payment" correctly, you are wondering whether you can offer a lump sum to settle the debt/s? Have you already started saving towards a deposit? If so, you could consider using some of those savings to negotiate a settlement - our fact sheet explains more:


https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Default.aspx


I can't advise you whether letting the default expire without paying it is the best thing to do - just that it is a "gamble" and that as such, you take it at your own risk.


Bear in mind that the defaults on your credit file will not be having as large an adverse effect on your creditworthiness as the CCJ (while it remains on your report).


Dennis
@natdebtline