Any Help?

FeeGee29

Hi,

I'll give u some background before my questions,

We own a property with only 11 years left on the mortgage, we lived in this house until 4 years ago, when we built a house. We have rented the house and the monthly rent covers the mortgage with £120 left over extra each month.

We tried to refinance the property last summer but due to a bad credit rating this wasn't possible, our credit scores on experience are 280's for myself and husband, just a few missed bills over 20 months ago, (disappointed, as we were over 400's, three years ago), we have a Santander credit card who we bank with the limit is £2200 and we are at at £1800 we pay £120 per month to this card. We have another card with Nationwide at £2200 and pay minimum monthly payment, and a Laura Ashley credit card with £1300 that we also pay minimum per month. Also a next card with a balance of £220 and a credit limit of £5000

So my question is we have the money to pay the Nationwide and Laura Ashley and Next off in full, are we better to pay in full and close the accounts, or pay £500 per month to each credit card clearing the balance in 5 months,. Which will improve out credit rating? As we would like to refinance our old property possible this summer?

Thanks you.

[Deleted User]

Clear them. High debts and minimum payments look bad to lenders.

But don't be concerned about your credit scores as no one sees them and they're irrelevant.

FeeGee29

Thanks, do u think I should leave the cards with a nil balance, or should I close them altogether?

[Deleted User]

Neither. Keep at least one and use regularly, paying off in full each month.

LuckyJack1988

It was my understanding that part of your credit score is made up based upon the age of your credit accounts.....it goes into great detail on the Experian credit reports about how old each open account is - the older the account, the better! So bearing this in mind, it would improve your credit score by settling these accounts and keeping them open. Also, it will lower your % of available credit being used e.g. if you have £5,000 available credit to you, and you're using £4,500, this looks as though you're unable to manage your finances and you max out the available credit you have. BUT if you have a couple of credit cards that have a £2,000 limit of which you're only ever using £50 or nothing at all, the % share of credit being used will be low.

So, clear off the outstanding balances, use them to buy small items, pay them off every month and they'll improve your credit score.

MEM62

LuckyJack1988 wrote: »

It was my understanding that part of your credit score is made up based upon the age of your credit accounts

Then you have not done any research on these forums.

Credit scores are meaningless. They are randomly generated numbers designed to fool people to sign up the CRA's subscription services - in order to monitor and 'protect' this randomly generated number. It is the data on your credit report that lenders see and each lender has their own criteria by which they rate you.