Almost there. What next?

Given2Fly1981

Hi

After a peak of almost £9k, I'm finally almost debt free. I've been making regular payments through a fee-paying company (I know, I know, but they let me keep a couple of accounts out - a catalogue which is paid my another family member, and a couple of loans which at the time were almost fully paid). I figure the 17.5% fee is still cheaper than just Vanquis' interest...

It's an incredibly liberating feeling to finally see the end in sight, I have maybe 4 payments left.

So what happens next? I've been in debt since I was 18 (nearly 35 now). What happens to the accounts on my credit files? I've checked Noddle and only Capital One out of 6 creditors has logged a default (2 accounts) back in 2014 when I started the DMP. Most of the others show either AR or DM.
The only active credit account I have now are my bank account (small OD facility), my phone bill, and the aforementioned in-law's catalogue account which is slowly going down.

How can I improve my credit rating? At some point in the future I'd like to be able to apply for a mortgage. Obviously I realise as it currently stands I'd be laughed out of the door.
I don't want credit cards, I suffer from the occasional bout of depression and impulsiveness, so I'd rather not have the temptation in my wallet. Any ideas?

HappyMJ

Your accounts should show as closed and settled.

How to improve your credit rating?

Get credit cards, use them, paying them off in full each month.

You need to show responsibility using credit. The temptation needs to be there and you need to be able to manage that temptation to use it responsibly. If you can't do that then it's quite difficult to improve your credit rating by doing nothing.

You only need to use the card once per month so I would leave it at home most of the time and only put your grocery shopping on it when you do your weekly shop and that's it.

ShiftThisDebt

Martin Lewis's money show is doing a whole episode next Friday about how to boost your credit rating. Probably worth watching!

Given2Fly1981

@HappyMJ fair point about temptation and responsibility I guess. Not sure that any of the main providers will touch me now though, given that I had accounts with most of em.

@ShiftThisDebt thanks, I'll look out for that.

sourcrates

Hi,


I would not get credit cards again, they are just too much of a temptation, and once the card companies have you, they intend to keep you, subtle interest offers, increasing credit limits, before you know it, your 30k in debt again, DONT DO IT !!!!!!

Wait a few months, get a contract mobile phone, unless you have one already, don't go overdrawn at your bank, be on the electoral role, pay your bills on time.

There is no NEED to have to resort to loans or cards to improve your chances with lenders.


Oh, and I`d bang in a claim to that debt management company to reclaim those fees as well, those sort of people profit from your misery, time it was stopped !!!!

lambda

Hi

Well done for nearly paying off all that debt! It must feel amazing to you!

In my opinion, don't get any more credit cards. If they don't work for you, don't use them. Otherwise, like other people say, you will just end up back where you started. Just don't go down that route.

To get a mortgage you don't actually need credit cards at all. Just make sure you pay your bills on time, you are the electoral role, and you keep your bank balance in credit at the end of each month. Obviously, your past credit history will show up, so you may need to wait for that to die down, but what is most important is that you can show that you can make a mortgage commitment each month. I have family who have just recently got a mortgage and they are the type of people who have never had a credit card or loan in their life. They buy everything outright. Didn't stop them getting accepted. When it comes closer to the time when you want a mortgage, it may be worth speaking to an advisor about it. But, honestly, you don't need credit cards to get a mortgage.

Given2Fly1981

Thanks guys. I am kinda resistant to signing up for more credit cards, as it only takes one moment of weakness. I've got a contract phone, so I'll work on keeping that paid, and concentrate on building up savings (using the £400 per month I've been paying off my creditors with).