Wild Oats to Sow and Credit Ratings

Greenation

Hello,

To begin with, as you can tell by the title of the thread, I have made a few mistakes. On my way to this point in time, I've made mistakes.

Specifically, the amount of money I have frittered away on alcohol, cigarettes, softer highs, holidays, gambling and junk food. I have 3 defaulted accounts to my name and my credit rating is of the lowest category and nowhere near reaching the next level.

I rent my current abode. I have no overdraft, no credit card and the only credit accounts I have to speak of are four outstanding payday loans split across two lenders. I currently have 43 settled credit accounts that are all payday loans.

The defaulted accounts occurred in 2014 so I think within 18 months to 2 years these accounts are removed. Can I expect a considerable spike in my credit score?

My concern is that I will have to wait a considerable amount of time to get a mortgage. I have not even inquired with any lenders just yet. As it goes I am tied into a tenancy agreement for a while. I was hoping to re-build my credit score somewhat before making an attempt.

Payday loans, despite the consistency at which I procure them (I live payday-to-payday) do not appear to have much influence on the credit rating. I usually settle them in full, and early, much like an overdraft. Probably not the way to go?

I definitely think the 3 defaulted accounts are a blemish that I cannot wait to see wiped. Is the scar fully healed after 6 years? No trace?

I have to say I have been at my new job for nearly 3 years. I have a full, permanent contract and that's actually rather fortunate. I fell out with several co-workers at the beginning of my stint because of the magnitude of stress and shame that I was under. I have managed to settle all defaulted accounts, however.

Other negative factors include the electoral roll to which I am not registered with my current address. This is something I have already begun to amend. The average of age my credit accounts is 9 months. I am not sure why this is bad but presumably it's because of the amount of time it took to settle the outstanding balances on the 3 delinquent accounts. Again, I am hoping this will very much be dealt with when such get wiped.

I have opened four new credit accounts in the last six months. I am not sure that I understand this at all. I have 43 settled accounts so I'm not sure how this is not 43 in the last 6 months?

I have also made 13 credit applications in the last 6 months.

This is my current plan. Save for a couple of months so I have a buffer.
Apply for an overdraft.
Apply for a credit-builder credit card.
Sit tight and wait for the delinquent accounts to be removed from file.

Even so...I have found all of this distressing and can't wait to be out the other end. :beer:

[Deleted User]

Greenation wrote: »

The defaulted accounts occurred in 2014 so I think within 18 months to 2 years these accounts are removed. Can I expect a considerable spike in my credit score?

Sadly not. You can expect a further drop, becuase credit scores tend to react negatively to change of any kind.

The good news is that as the credit score is fictional and not seen or used by anyone, it can be safely file alongside your horoscope and tarot readings.

Stop using payday loans. You're telling lenders you live beyond your means and cannot handle credit.

Apply for a credit card. Any will do.

Use it and clear in full each month.

Make sure you're on the ER.

Pay your bills on time.

Time will do the rest.

[Deleted User]

Greenation wrote: »

Hello,

To begin with, as you can tell by the title of the thread, I have made a few mistakes. On my way to this point in time, I've made mistakes.

Specifically, the amount of money I have frittered away on alcohol, cigarettes, softer highs, holidays, gambling and junk food. I have 3 defaulted accounts to my name and my credit rating is of the lowest category and nowhere near reaching the next level.

Ignore your credit score/rating - it's made up and no one sees or uses it

I rent my current abode. I have no overdraft, no credit card and the only credit accounts I have to speak of are four outstanding payday loans split across two lenders. I currently have 43 settled credit accounts that are all payday loans.

Settled or defaulted, that amount of PDL's will instantly set alarm bells ringing to any prospective lenders

The defaulted accounts occurred in 2014 so I think within 18 months to 2 years these accounts are removed. Can I expect a considerable spike in my credit score?

Possibly yes - but as above, ignore it

My concern is that I will have to wait a considerable amount of time to get a mortgage. I have not even inquired with any lenders just yet. As it goes I am tied into a tenancy agreement for a while. I was hoping to re-build my credit score somewhat before making an attempt.

You are likely going to be waiting 6 years for all those PDL accounts to drop off before a mortgage lender even touches you, even a good broker is likely to turn you down

Payday loans, despite the consistency at which I procure them (I live payday-to-payday) do not appear to have much influence on the credit rating. I usually settle them in full, and early, much like an overdraft. Probably not the way to go?

Stop taking PDL's immediately

I definitely think the 3 defaulted accounts are a blemish that I cannot wait to see wiped. Is the scar fully healed after 6 years? No trace?

All the PDL's, whether defaulted or not, will be harming your credit history. The defaulted ones more so. Are the defaulted ones paid? Or balances oustanding?

I have to say I have been at my new job for nearly 3 years. I have a full, permanent contract and that's actually rather fortunate. I fell out with several co-workers at the beginning of my stint because of the magnitude of stress and shame that I was under. I have managed to settle all defaulted accounts, however.

Other negative factors include the electoral roll to which I am not registered with my current address. This is something I have already begun to amend. The average of age my credit accounts is 9 months. I am not sure why this is bad but presumably it's because of the amount of time it took to settle the outstanding balances on the 3 delinquent accounts. Again, I am hoping this will very much be dealt with when such get wiped.

I have opened four new credit accounts in the last six months. I am not sure that I understand this at all. I have 43 settled accounts so I'm not sure how this is not 43 in the last 6 months?

I have also made 13 credit applications in the last 6 months.

This is my current plan. Save for a couple of months so I have a buffer.
Apply for an overdraft.
Apply for a credit-builder credit card.
Sit tight and wait for the delinquent accounts to be removed from file.

Forget the overdraft. Apply for a credit card, only use it for what you can afford i.e. usual monthly purchases, then pay it back in full each month following the statement being issued

Even so...I have found all of this distressing and can't wait to be out the other end. :beer:

The PDL's will hurt you big time. They are going to need to drop off for anything positive to start happening with your credit history.

The rest of my responses are above

Willing2Learn

@OP if you're living paydayloan to paydayloan then you are constantly in debt. I suggest you switch over the Debt-free wannanbe (DFW) board for advice and support with managing your monthly budget.

Greenation

!!! wrote: »

The PDL's will hurt you big time. They are going to need to drop off for anything positive to start happening with your credit history.

The rest of my responses are above

So the payday loans are on my credit history for 6 years? So I need to not have acquired a payday loan for 6 years before I get a mortgage?

The delinquent accounts were not payday loans but actually overdrafts and a credit card.

[Deleted User]

You will have options within the 6 years, but from a restricted pool of lenders.

You'll need a good broker who specialises in adverse credit.

[Deleted User]

Greenation wrote: »

So the payday loans are on my credit history for 6 years? So I need to not have acquired a payday loan for 6 years before I get a mortgage?

The delinquent accounts were not payday loans but actually overdrafts and a credit card.

They remain on your files from the date of settlement or default.

The defaulted OD's and CC's - are they paid off?

Greenation

!!! wrote: »

They remain on your files from the date of settlement or default.

The defaulted OD's and CC's - are they paid off?

I defaulted in 2014 but both ODs and CCs were paid off early this year.

[Deleted User]

OK so they will drop off 6 years from the default date.

The rest will drop off 6 years from the date they were settled

Greenation

!!! wrote: »

OK so they will drop off 6 years from the default date.

The rest will drop off 6 years from the date they were settled

I have to say this is disappointing. I was pumped earlier on when I realized the delinquent accounts would soon be wiped. Now I discover that my payday loan applications will be a new hindrance. That means I will be 35 years of age before I can apply for a mortgage.

The property I would be looking to buy would be sub £100k. We're talking a terraced house in the North of England.

[Deleted User]

The searches will drop off between 12 and 24 months dependant on the CRA.

The actual accounts will come off 6 years from the date they were closed/settled, with the exception of the defaulted accounts which will be sooner - 6 years from the date of default.

https://equifaxuk.custhelp.com/app/answers/detail/a_id/238/~/how-long-will-information-stay-on-my-credit-report%3F