Credit sscore and mortgage

simonebrogan

hoping im posting in the correct place..i am 30 years of age and have been quite bad with my choices in money over my years , mostly when i was younger taking out credit cards, payday loans ect and fell int a vicious circle of contant loans upon loans. i last checked my credit file about a year ago and was poor at around 350 odd, today i checked it and it is 197!! my heart sank, looks like i have around 10 defaults that 1st defaulted around 4 years ago, i am still paying them bit by bit but am i right in thinkinging they drop off after 6 years? i have been very stupid and am trying to fix it, my parents have kindly offered me to move back in for a few years while i save for a mortgae for me and my little boy, my question is will i ever be able to get a mortgage and is 6 years enough time to get a good enough score? im going to save hard for 6 years then hopefully my score would have improved, is that dooable or is it not how it works? thanks

simonebrogan

and obviously not take out any credit in the meantime. i do have a creditbuiding car though

Arleen

Keep in mind that credit score means nothing as only you can see it, focus on what is on your file instead.

The debt goes away either after 6 years from default date when no payments were made. But they can go to court and get a CCJ against you within those 6 years and it will show up then on your file for next 6 years.
As you've made payments and this acknowledged your debts (good for you!), the defaults will only go away 6 years after last activity on the account. So the sooner you will pay them off in full, so they will become settled, the sooner they will go away as they will go away 6 years from date of satisfying them.

Moving back with your old folks is indeed a good move, you can save up a lot of money that way (make sure to pay your share of expenses) which you can put toward repaying all the debt. You may also consider contacting good folks at http://www.stepchange.org/ to help you negotiate a realistic repayment plan. Having them on your side usually allows you to negotiate a better deal with a lender and, for example, have interest frozen on the loans which will make it much easier to repay them.

As for mortgage, I wouldn't hope to get one within the 6 years of your last settled default as they have massive negative impact on your application. The upside is that you can use this longer time for a bigger deposit which will result in easier times getting the mortgage at a better rate.

simonebrogan

thank you, yes thats what i was thinking, save for 6 years and hopefully they will be gone, what i dont understand is my defaults are around 4 years old so willl drop off in 2 yes?.. i fi settle them in full now will that bring a new 6 year date to life? pointless otherwise?

Arleen

Defaults will disappear 6 years after last activity on the account, so last payment or the date it became default. Payments made are an example of an activity, so every payment "refreshed" the 6 years.
But before you jump to conclusion, you did the right thing by paying them, even if just bit by bit. Because fi you didn't then the debt will most likely go to collections, then to courts and your file will then show not only a default but also a CCJ. So before you will go saving up for mortgage you will have to pay off the debt.

simonebrogan

the debt has already been passed to debt collectors, all 10 of them, really bad i know but it is what it is, i have an arrangement for £2 a month with each one and probably owe about 8k in total so no chance of paying that back any time soon, thats why i was hoping the default dates on my credit file from 2011 would drop off soon, obviously i would still continute to pay

Arleen

simonebrogan wrote: »

the debt has already been passed to debt collectors, all 10 of them, really bad i know but it is what it is, i have an arrangement for £2 a month with each one and probably owe about 8k in total so no chance of paying that back any time soon, thats why i was hoping the default dates on my credit file from 2011 would drop off soon, obviously i would still continute to pay

They are not going to just drop off, sorry. I don't know your situation, but it sounds like you need to not only curb your expenses but also look for additional income, as 8k is not an unbeatable sum to repay if you will work hard toward it.

Thrugelmir

simonebrogan wrote: »

the debt has already been passed to debt collectors, all 10 of them, really bad i know but it is what it is, i have an arrangement for £2 a month with each one and probably owe about 8k in total so no chance of paying that back any time soon, thats why i was hoping the default dates on my credit file from 2011 would drop off soon, obviously i would still continute to pay

This will need to be declared to lenders. If you can afford a mortgage, then you can afford to pay more back every month. Your choice of course. Though there's no such thing as a free lunch. You do have the ability to restore your reputation but it's not an easy ride.

alleycat`

I probably misunderstand, i frequently do, but could you even pay off £8K at £2 a month(?)

Assuming you are paying 10 at the same rate that'd be around 30 years?


On the positive side and as others have said; £8k is not a number that can't be overcome.

NB:-
I've assumed 10 from the defaults number.
It's possible that assumption is very wrong on my part but it still seems unlikely you'd shift that in a hurry?

simonebrogan

well i have spoken to experian who have told me the defaults wil fall off after the six years is up weather i am still paying or not and the lender cannot re register them, the reason i am moving back home is to save for a mortgage which is going to be hard enough as it is without paying 8k back first, my active credit is pretty okay just them old debts bringing it down, if they are not on my credit file there is no way of a lender knowing unless i declare it which i dont see the point in as it wont get me anywhere

DCFC79

simonebrogan wrote: »

well i have spoken to experian who have told me the defaults wil fall off after the six years is up weather i am still paying or not and the lender cannot re register them, the reason i am moving back home is to save for a mortgage which is going to be hard enough as it is without paying 8k back first, my active credit is pretty okay just them old debts bringing it down, if they are not on my credit file there is no way of a lender knowing unless i declare it which i dont see the point in as it wont get me anywhere

Lenders go by your credit history which is 6 years worth so anything older than that you dont need to declare and the lenders dont care.