Cleaning up credit record

FortunePig

Hi
I have a question on credit records and how long it takes for them become cleaner after a DMP.
I started a DMP in Oct 2010 and completed it with a full and final settlement offer in Jan 2012. This was because I was given a gift of money that I used to make a settlement offer to my creditors and bought my DMP end date about a year ahead.

When I check my Noddle credit report I am at 541 and a score of 1/5. This never moves despite my having currently opened accounts that are operated in good order back to 2012.

What has created this is that all my DMP accounts show as settled and are in the green through my DMP period, with the exception of Barclays. Barclays is showing as satisfied with a default date of Oct 2010. Fair enough - I knew this could happen. The rant over the fact that they were the only ones to default me when I had the lowest debt with them is something I do in private!

I think that this single record is the only thing holding my credit down as all my other closed and open accounts are lit up with green like a Christmas tree .

Could anyone tell me how likely it is that when Oct 2016 comes around, my credit rating will start to slowly improve? I have proven my changed ways in the last 5 years with a car loan on PCP (which I intend to refinance if I can and buy outright leaving me eventually with a 7 year old car all paid for rather than paying for a succession of 2nd hand ones that need work done) and good management of credit cards. I do borrow now but I have a good job and my borrowing is budgeted for and only happens where needed and I know where the money is coming from to pay it off.

My longer term dream is to buy a house which I have a decent deposit for already. At the moment though, this default seems to be scaring lenders off. I do want to wait a bit and see what the market does as where I live is expensive (south west)? and a couple more years isn't a huge problem as I'm in my mid 30s. We may need to move further out of the city or things could change and we can stay where we are. We have 10 years of a life and jobs here so please don't suggest moving miles away to buy - I'd rather wait and keep saving and watch for an opportunity.

For the sake of my longer term sanity (as I worry about being poor and destitute in my old age if I can't buy soon and get some equity behind me) could anyone give me some indication of how my 2010 default dropping off at the end of 2016 could affect my credit score and how long it may then take for it to improve so I can eventually get on the housing ladder?

TIA!

sourcrates

Hi,


Ok, first off, credit scores, credit ratings, whatever you want to call them, are totally meaningless figures, created by the credit reference agencies, in order to try to sell you products or services, they serve absolutely no other purpose than to create profit for those particular companies.


Any potential lender never sees that information, they make all there lending decisions based purely on there own "credit scoring systems".


Every company has a different technique for scoring you, and this information is never divulged, you can only guess at what they look for, for example, do you make your credit repayments on time every month ?, or, are you on the electoral role ?, things like that.


All you can do, is make sure you make all your credit repayments by the due date, don't make late payments, basically pay on time, have a steady address history, be on the electoral role, just basic common sense things like that.


Any negative information on your file will disappear after 6 years, in reality, dependant on the lender, the further back in your credit history, bad information is, the less impact it will have on you.
Do not be fooled by the advertising hype from the likes of Noddle, Experian, and Equifax, saying they can improve your credit score, of course they can, for a fee, they create it, they can manipulate it, but its a meaningless figure, that lenders don't see, only you and they see it, its all a profit making exercise, for them.

DandelionPatrol

A settled default in 2010 may actually be acceptable to some lenders. Really, if everything is settled, you have graduated from DebtFreeWannabes. The expertise for getting a mortgage with your credit history is best found on the Mortgages and Endowments forum, although Sourcrates has made very useful comments.

Kitten868

Noddle are pretty strict. I have never defaulted or had any credit issues but my score is 1/5 or 2/5 every other month. I wouldn't worry too much.
I think it's because I'm in my overdraft.
It'll take 6 years to come off your record - so 2018 -when it's settled from my understanding.
Have you considered a mortgage broker to look at the best deals for you with the pre-approval without marking your credit file? Just to give you more confidence in applying?
I'm on clear score too now. Really like it as it says how much smaller your debts is month on month.

LittleDutchgirl

I echo sourcrates and suggest ignoring Noddle completely. I have just cleared my credit cards and my most recent score has actually gone down. I figure that they are trying to sucker me into signing up for their improve service.
LDg

rockm87

I agree with that, and also add an echo from Dave Ramsey (which I hope can be helpful).

He says that your credit score is your relationship with debt, not a measure of wealth. He has no credit score, but he is a multi-millionaire.