Play off loan for high score or pay off defaults keeping score low?

Deanotree

Hello experts...

As per Experian, I have a "very poor" score - verging on "Poor".
I have 1 CCJ to pay off and 3 defaults - totaling £2000 when combining all 4.
I also have a loan that has the option for an early pay-off that totals £1500 to clear.
Based on a previous credit account (tv/phone) that I decided to not continue with as I moved back to my parents, my score increased by well over 300. I presume if I paid off the loan early (11 months early i should add) it will jump up again in the same fashion into "Good", nearly "excellent".

To obtain a mortgage (i'm lucky enough that I've been promised the 5% deposit on a HTB or Shared Ownership scheme), would a high credit score with the unsatisfied defaults be more beneficial, or a low credit score with everything satisfied? I have enough to pay off 1 or the other right now.

I would of course pay £500 towards the unsatisfied "dents" in my history - all between 2-4 years old - and eventually the rest. I am just very eager to move on now so looking for the best short term fix.

What would an expert recommend to speed up my process and obtain acceptance?

Thank you

Willing2Learn

Hi

You are focussing too much on your score and not enough on your history (the data held in your credit files).
A potential lender will score you against their independent criteria and polices, using the data contained within your credit file(s), added to the data you submit in your credit application. They don't see your Experian score and definitely don't use it either.

The CCJ and defaults really impact negatively on how you are scored by lenders.

Edit: And welcome to the forum Deanotree

T-G-C

In the eyes of a lender, a satisfied anything is better than an unsatisfied one. However, satisfied or not, it will still have a significant influence on the decision and a credit score will not provide an ounce of reassurance or indication, since as already explained, lenders use different software to assess risk.

I have never been in that situation and therefore wouldn't want to provide an answer that could make things worse, so I would recommend focusing on the credit file data and start to fix things in areas that could negatively impact you. If that means settling a default and can afford to, then do so by all means, however there is no guarantee or outlook in principle whatsoever to suggest that it will influence a credit application one way or another. It merely depends on the lender and their view on it.

Even resolved quirks in your visible credit history can leave lenders pondering, so to sum things up, the best healer of a poor credit file is both time and improved financial management.

DCFC79

If you were a lender would you lend to yourself with them defaults and a CCJ ?

It may take time to enable you to get a decent rate. A broker who deals in adverse credit histories might be an option.