Q: How long to improve credit rating

angelpye

Hi all,
I am back after being debt free then behaving badly again...LBM = my credit rating is smashed.

I have a mortgage due for renewal in two and a half years and my main concern is that my credit rating is terrible. This looks due to a few inconsistent payment marks on my credit card, being very near my limits and not being on electoral role (I had a stalker at last address but have been brave and registered). Mortgage, bank account, mobile etc all paid on time.

I know I need to pay off my credit card and applied for 0% but only got an offer for a small amount. I needed to increase my debt to cover some costs coming (I know, stupid to not have planned when previously I could). I need to pay this all off in the hope, if it comes to it, of getting some 0% credit to pay for a few essential house repairs coming. And then pay this off before mortgage renewal.

Due to my current situation I do not have the money to save for the expenses and there is no flexibility on waiting. I am looking at things I can sell in order to pay things off faster and in the hope I don't need to take credit to pay for house repairs - 0% credit card would be going backwards so has to be a last resort!

Oh, this sounds terrible. Juggling when I should have saved. Writing it always makes me feel shameful. I am expecting a scolding and I am embarrassed to be in this situation.

So, I am assuming if I pay off a regular amount to my credit cards without being late and as much was I can afford that my credit rating will rise. If so, how long will this take and once it is good again how long before I can apply for 0% card/mortgage in order to get a good deal.

I hope this makes sense and is in the right place. I have been lurking for a few days and it feels a little like returning to somewhere you used to live and forgot how much you felt supported.

Great to see some old faces have worked hard and succeeded on real change - time to join you for real this time. I want to be debt free but also need to just get through this.

[Deleted User]

You don't have a universal rating - as a result, there is no single answer.

Different lenders will view you according to their own criteria. Decent 0% offers tend to be for those with long term decent track records. So I'd suggest you would be looking for a good couple of years of solid behaviour to get a half decent offer, perhaps longer.

angelpye

Thank you zx81, so if I 'behave' from now on I may just be in time for my mortgage renewal?

[Deleted User]

I'd certainly suggest using a broker, so your application gets placed with the right lender.

EssexHebridean

This really is a "piece of string" question.

- Read Martin's guide on credit history on the main site - LOTS of useful info there.
- Register with the MSE credit club if you haven't already.
- Put together your SOA (Statement of affairs) if you haven't done that yet - link is in the "Sticky" post at the top of the board.
- Post the SOA in here and we can take a look to see where any savings can be made, that you might have missed.

Above all, focus on seeing what you can do to avoid taking any more credit (yes, even 0% cards) and also throw every bit of determination you have into repairing the situation, rather than worrying about what "might" happen in over 2 years from now. An eye to the future is good - but at the moment it sounds as though you need to think more about the focus on dealing with the immediate issues, than worrying about the future

angelpye

First ever full disclosure:

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details[/b]
Monthly income after tax................ 864.305
Partners monthly income after tax....... 0
Benefits................................ 188.7
Other income............................ 200
Total monthly income.................... 1253

Monthly Expense Details
Mortgage................................ 513.1
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 74
Gas..................................... 0
Oil..................................... 0
Water rates............................. 28.1
Telephone (land line)................... 40
Mobile phone............................ 35.99
TV Licence.............................. 12.12
Netflix...................... 7.49
Internet Services....................... 0
Groceries etc. ......................... 165
Clothing................................ 20
Petrol/diesel........................... 30
Road tax................................ 16.2
Car Insurance........................... 40.48
Car maintenance (including MOT)......... 17
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 5
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 43.66
Other insurance......................... 0
Presents (birthday, christmas etc)...... 33
Haircuts................................ 4.5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 38
HMRC.................................... 26
Child Trust Fund........................ 10.01
Adobe + itunes storage ................. 9.36
Total monthly expenses.................. 1184.01


Assets
Cash.................................... 0
House value (Gross)..................... 213300
Shares and bonds........................ 0
Car(s).................................. 1200
Other assets............................ 0
Total Assets............................ 214500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 113000...(513.1)....3.38
Total secured & HP debts...... 113000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
CC1 ...........................1589.22...50........26.18
CC2............................500.......10........12.9
CC3............................500.......5.........0
Total unsecured debts..........2589.22...65........-


Monthly Budget Summary
Total monthly income.................... 1,253
Expenses (including HP & secured debts). 1,184.01
Available for debt repayments........... 68.99
Monthly UNsecured debt repayments....... 65
Amount left after debt repayments....... 3.99

Personal Balance Sheet Summary
Total assets (things you own)........... 214,500
Total HP & Secured debt................. -113,000
Total Unsecured debt.................... -2,589.22
Net Assets.............................. 98,910.78

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.[/font]

The reality is I had to move numbers around to make it fit - I usually spend more on food etc (approx £70 per week) due to medical dietary requirements and skin issues. I also have nothing in leisure other than gym but I was going out before xmas (£30 per month) - I have stopped and declined all invites to do so. I moved numbers because this is going to have to be what I live on until April when money goes up by approx £153 per month.

I have savings accounts that have nothing in but should probably utilise for yearly expenses. I am due to get approx £450 in next couple of weeks from road tax refund and a backdate on a grant - not really sure what to do with it... pay off some of cc or put towards expenses coming in next couple of months?

Any comments welcome.

Mobile contract has approx 12 months left on it.
Landline and Internet due to the need of decent internet and has 20 months left.
Gas and Electric one amount.
Adobe necessary
No council tax
Could cancel Netflix but do like having it
Gym not really been using but I am hoping not going out will lead me to use it and would be good for mental health which is pretty poor atm - also can swim for free with DD but we haven't recently.

dirtycredit

Hiya,

I think that if you renew with the same bank they don't credit or crucially if you have debt/low income, affordability check you.

I renewed and stayed with S4ntander and they didn't do any checks and I still got a good deal. Thank god because although my credit references/score are always perfect the affordabilty checks are so strict now that with the amount of debt I had I don't think I would have got a remortgage with any bank.

Read this:http://www.moneysavingexpert.com/news/mortgages/2016/06/i-was-a-mortgage-prisoner-but-escaped-thanks-to-mse-and-saved-3600

Good luck,
DC x

theoretica

angelpye wrote: »

Could cancel Netflix but do like having it

Rather than cancel, you could set yourself a challenge to make enough extra each month to pay for it.

angelpye wrote: »

Gym not really been using but I am hoping not going out will lead me to use it and would be good for mental health which is pretty poor atm - also can swim for free with DD but we haven't recently.

Don't just hope - use it or lose it! Keep a record of how often you go, and see what it is really costing you per hour of exercise.

angelpye

Thanks dirtycredit, affordability is something that worries me too. I got this mortgage by the skin of my teeth even though I had approx 50% deposit due to separation settlement. My income has taken a massive dive since then which at some point will get better but not sure when.

Theoretica, you are right. I have very little room for manoeuvre in my budget so need to make sure what I do spend on is definitely worth it and find ways of paying for treats or cancel them. Simples. If I had to choose I would rather Gym over Netflix as I waste too much time hiding in films and binge watching series ( ANY series) just to hide from life.