how best to protect/rebuild my credit score while negotiating a debt.

Dreamatorium

Hi, I was hoping for advice on my current financial situation and how best to protect/rebuild my credit score while negotiating a debt.

For context I have had very serious and long term medical issues for the last couple of years and am not well enough to work and have no income outside of benefits, which are barely enough to make ends meet.
I have been slowly working towards clearing all of the debts I generated when I first fell ill and want to rebuild my credit rating, which was severely damaged by this situation.
The last debt I have is an outstanding credit card debt on a defaulted account. I am very keen to have the matter settled as its actively damaging my credit rating.

The account is currently with a debt collection agency called The Zinc Group, but no bailiffs are involved as I’ve kept open communication with the company and proven my medical issues to them.

It sounds like they are willing to negotiate a 50% settlement rate with me as I am unable to replay the full amount. They have warned me that this will lead to having ‘partially settled’ on my credit score until 2022.

How bad is having this on my credit score?
Am I still actively able to take steps to rebuild my credit score with this on my account, or will it keep my score damaged/low until it is removed in three years? (the account was closed three years ago).


Is it wiser to settle the account at the reduced 50% settlement rate (which I could do tomorrow) or enter into a very long repayment plan where I only pay back a few pounds a months until the debt is settled? Which is going to have the most adverse effect on me attempting to rebuild my credit rating?

Thanks for all your help in this matter.

[Deleted User]

Easy.
Don’t focus on rebuilding or improving your score.
It’s not a real number and lenders don’t use it.

A settled debt looks better than an unpaid debt or partially settled debt.

But then a partially settled debt looks better than an unpaid debt.

Ben8282

The default will remain on your credit files until 6 years after the default date regardless of any action that you take.
If you are not well enough to work and have a very low income from your benefits, what credit applications do you intend to actually make? If you can't afford the existing ones, how will you be able to afford the repayments on any new ones?

Dreamatorium

The default will remain on your credit files until 6 years after the default date regardless of any action that you take.
If you are not well enough to work and have a very low income from your benefits, what credit applications do you intend to actually make? If you can't afford the existing ones, how will you be able to afford the repayments on any new ones?

With a credit rating as low as mine I will struggle to get a phone contract, or a rental agreement on a different flat if I had to move. It's also been recommended that I get a credit card that I use exclusively to pay my rent and bills on (which I currently afford). But its not so much that I want to make credit applications now, its more that I want to start the process of repairing it so that when I am well enough to work again the rest of life isn't still in pieces.

Thank you for the information about the default remaining on my account regardless, thats useful to know. Am I right in thinking that even if I could pay the amount in full (hypothetically, because I can't) it wouldn't greatly improve things?

sourcrates

Dreamatorium wrote: »

Thank you for the information about the default remaining on my account regardless, thats useful to know. Am I right in thinking that even if I could pay the amount in full (hypothetically, because I can't) it wouldn't greatly improve things?

It’s the default that causes the damage, how you choose to settle the debt is really irrelevant, credit file wise, you may as well obtain the best deal possible.

Once the default drops off your file, your credit history will improve with time.