Help to raise credit rating to help business grow

Mitchel.

Hello everyone,

I have aggressively started to pay my debts off beginning of this year as i am self employed with my own little business which i want to expand. I am a tree surgeon and most the big contracts and big jobs involve big kit which i can't afford or hire purchase because of my bad use of credit in the past which is a bummer. Basically my plan is to improve my credit file hopefully with in 6 months to allow me to purchase a larger chipper. My current one is old and tired breaks alot then i end up hiring one in while paying for mine to be fixed and the rental one currently this year has cost me £1400 in rental and £1200 in repairs on my own chipper. Where as with a new machine would come with 3 warranty and be bigger meaning better productivity plus the bigger more profitable jobs. I am going to be putting £6000 down on an £18000 machine paying the rest of the machine off over 4 to 5 years. so the finance company seemed happy with debts cleared and 3 months of bank statements with no bounced payments.

Anyways i am droning on sorry so what i would like help with is becoming more attractive to lenders i have checked my credit file it only shows 3 small ccj's of which i paid 2 off last month with one left of £600 which i am waiting for the man to come back to me with his bank details for. So once thats paid the last thing i can see on my credit file is an overdraft from 2011 which i stopped paying when i lost my job in 2012 its for £1422 i have set a payment plan up for that today for £100 a month thats a minimum payment will be paying another £200 a month on that as it comes in because i don't get paid at the end of the month being self employed . I did have a loan to in 2010 which i cant find on my credit files i know i've had the odd letter about it over the years but cant find them so will contact santander tomorrow to set up a payment plan for that to.

so i've got an aqua credit card with a pitiful £300 limit given to me this month how am i best off using it? spend 50% of the limit each month then pay off full balance at the end of the month or leave some on?. The apr is horrific on it 59% apr but does have 6 months 0% on purchases from the card activation date. Also once the 6 months is up should i cancel the card apply elsewhere for a better deal?.

Any other great ways for get my credit file more attractive so in 6 months time they wont refuse me on a hire purchase proposal?.

Really appreciate all the advice this forum gives will be doing a debt diary soon.

Mitchel.

Ohh another question to sorry is if i offer a part settlement to my overdraft and loan that i didnt pay will this look bad on my credit history is it worth paying them off in full? as im looking to hire purchase a machine surely the finance company will be thinking we don't want only half our money back for the machine and avoid me.

forgotmyname

Anything showing as unpaid will look bad to a lender.

If you have £6000 to put down on a new machine then why not purchased a used machine from a specialist who rebuilds them and offers a guarantee?

New equipment breaks outside any warranty cover also.

One day it will be shredding away and then an almighty bag and it finds the 1" bolt used to build a tree house some 30 years ago, treehouse mostly fell down as the tree grew around the bolts.

How does it make sense to pay interest where you dont have to?

Fairly normal to hire big stuff as and when required. Whats the point in a huge machine to shred some old ladies privet?

You have £6k to put down but making minium payments?

Mitchel.

My current machine is £6000 which keeps breaking

Nobody rebuilds them in the industry you may get at most 90 days warranty at a high premium.

Yes thats why i pay £2000 a year in business insurance covers accidents with my chipper track clips bolts stones all covered for damage to total loss.

From what i can gather the interest is around 8 percent not alot really.

In relation to bigger stuff being rented in the competition also have this equipment bought if takes you a 1/3 longer to do a job costing the customer more who do you think they will choose.

Didnt understand the minium payments? Its a hire purchase i believe you can early settle but not over pay.

Nebulous2

Have you checked all 3 credit files?

If your loan defaulted in 2010 it will no longer show, as it would only be recorded for 6 years from date of default.

Mitchel.

Yeah i cant find it anywhere rang Santander today was a waste of time because i cant give loan account number or how much is left on loan i cant pass security. I defeaulted on it in 2010 course i cant remeber those things

tacpot12

Mitchel. wrote: »

...

so i've got an aqua credit card with a pitiful £300 limit given to me this month how am i best off using it? spend 50% of the limit each month then pay off full balance at the end of the month or leave some on?. The apr is horrific on it 59% apr but does have 6 months 0% on purchases from the card activation date. Also once the 6 months is up should i cancel the card apply elsewhere for a better deal?.

...

If your purpose in having the Aqua card is to improve your credit rating, then you will be best to spend as much as you can on the card, and pay of only the minimum each month. This behaviour is the most attractive to card providers. Taking this approach after the end of the Interest Free-period will endear you to NewDay, but will be very expensive due to the interest rate! I think I would clear try to get a new card with a lower rate and another free interest period at the end off the interest free period, and clear the balance on the Aqua card if you can. If you can't get a card, you might just keep repaying the interest and making minimum payments for another 6 months, then clear the balance.

What you MUST do is make sure you ALWAYS have savings that are earmarked to cover the outstanding balance on the card, so that if anything happens to your business, you can clear the outstanding balance immediately. The worst thing you could do now is get a further black mark on your credit file.

[Deleted User]

Clearing in full each month is the better thing to do - not just making the minimum payment.

Unless you are on a promo then always always always pay in full

forgotmyname

Mitchel. wrote: »

Nobody rebuilds them in the industry you may get at most 90 days warranty at a high premium.

You need to do your homework, several places rebuild these machines and sell with with a warranty. Some of those places also hire them so you get backup if it does fail or you get them to service it.