Have a damaged my rating/score

Jman123

Hi all. Firstly I have read the sticky thread about ratings which has already been a big help but if someone can advise on a specific question that would be great.

So the last 12 months haven’t been great. Stupidly I’ve maxed out all 3 of my credit cards. This is a mix of needing too at times and just spending to make myself feel better.

Im now in a better place but unfortunately it’s going to take years to clear it all.

My credit rating has gone down from excellent to good which I suppose isn’t the worst.

I’m going to get a loan to pay some of the credit card balances off reducing the utilisation % back under 70% and then contribute to pay off each month looking to get back under 50% in the next 2-3 years.

My concern is... have I stuffed my score for the foreseeable?

As in - it was still classed as excellent at around 80% utilisation. So if I get back under 70 will my score jump back up again fairly quickly or is it going to take a long time to fix the damage?

My main concern is mortgage. I have a mortgage which isn’t up for renewal for 3-4 years. I’ll be back under 50% until by then so am I right in saying even though I’ve been stupid recently it’s absolutely fixable and if I turn things around (even slowly) it shouldn’t come back to bite me.

Thanks

macman

The good news is that you don't have a credit score, so don't worry about that. They are fictitious. What matters is your credit history.
Consolidation loans are not the answer, you need to either reduce your expenditure or increase your income-or both. A loan does not 'pay off your debt,' it simply moves it elsewhere and means that you will most likely then max out your cards again.

Jman123

Thanks for reply. So ok - because I’ve been stupid and right now are over 90% utilisation. Presumably that’s going to stay on my credit ‘history’ for a while - even if I pay that off tomorrow for example.

So I suppose my 2 questions are.
1) if I reduce the balances every month etc etc and get that down to a more reasonable % over the next couple of years. Is this recent damage fixable in that time frame as such??

2) in terms of loans- yes that’s just moving the lending. But it’s moving it to more affordable repayments and I’ll be paying a lot less interest meaning I can pay more off the balances rather than paying mainly interest. And it will reduce my CC util %. Surely this is a better option right now?

For me I’m just concerned I’ve stuffed my credit score / history for the foreseeable when it’s basically been perfect beforehand. I Don’t want this to affect my family etc. Eg if and when we decide to remortgage in 3-4 years time. can I get things back on track in that time by slowly paying this off even if it won’t be clear by then etc.

[Deleted User]

Jman123 wrote: »

Thanks for reply. So ok - because I’ve been stupid and right now are over 90% utilisation. Presumably that’s going to stay on my credit ‘history’ for a while - even if I pay that off tomorrow for example.

So I suppose my 2 questions are.
1) if I reduce the balances every month etc etc and get that down to a more reasonable % over the next couple of years. Is this recent damage fixable in that time frame as such??

2) in terms of loans- yes that’s just moving the lending. But it’s moving it to more affordable repayments and I’ll be paying a lot less interest meaning I can pay more off the balances rather than paying mainly interest. And it will reduce my CC util %. Surely this is a better option right now?

For me I’m just concerned I’ve stuffed my credit score / history for the foreseeable when it’s basically been perfect beforehand. I Don’t want this to affect my family etc. Eg if and when we decide to remortgage in 3-4 years time. can I get things back on track in that time by slowly paying this off even if it won’t be clear by then etc.

1. What "damage" are you referring to?

2 No - all you're doing is moving the debt and spreading it out longer, taking longer to clear.

Stop mixing score and history up - score is irrelevant, history is not.

Jman123

In terms of damage. I suppose I’m getting at. My credit score/history was deemed as excellent up until recently. Which it’s now deemed in the good range. (Which again I accept isn’t the worst position) however there has been more borrowing on my CCards in the last few weeks so presumably my “score” will reduce further once my file updates.

But it’s now going to take a hell of a while to repay this debt. Probably 5+ years unless my finances significantly change in that time. I’m concerned then if we talk about history that my file will show I have large debts/large utilisation % during the next few years arguably damaging my history/score that I’ve had perfect for years.

And also on this basis will my history/score gradually get worse the longer the debt is on my file as such (even if it’s reducing slightly each month). On the basis that in 3-4 years time, there’s 3-4 years worth of high debt and high util % if that makes sense.

Basically everything on my report is spot on. Everything you could have as a positive is on there. The only negative is this high CC debt with high util %. That’s it. Everything else is perfect

[Deleted User]

You still don't have a score or rating.

You're reducing your debts. Lenders will view you as lower risk, while the CRAs view you as higher risk.

You just need to decide which of those two groups you want to impress. If you want to impress the CRAs, keep your debts high and don't look to reduce your interest rates.

[Deleted User]

Jman123 wrote: »

In terms of damage. I suppose I’m getting at. My credit score/history was deemed as excellent up until recently. Which it’s now deemed in the good range. (Which again I accept isn’t the worst position) however there has been more borrowing on my CCards in the last few weeks so presumably my “score” will reduce further once my file updates.

But it’s now going to take a hell of a while to repay this debt. Probably 5+ years unless my finances significantly change in that time. I’m concerned then if we talk about history that my file will show I have large debts/large utilisation % during the next few years arguably damaging my history/score that I’ve had perfect for years.

And also on this basis will my history/score gradually get worse the longer the debt is on my file as such (even if it’s reducing slightly each month). On the basis that in 3-4 years time, there’s 3-4 years worth of high debt and high util % if that makes sense.

Basically everything on my report is spot on. Everything you could have as a positive is on there. The only negative is this high CC debt with high util %. That’s it. Everything else is perfect

You're still crossing wires with scores and history.

The rating/score you see is not used by lenders, at all, and is not in any way linked to your history (the thing that actually matters).

Your score may well drop, but that doesn't matter.

To put things into perspective - bankrupts get a "999" score.
People with "999" scores get refused for £20 per month phone contracts.
But people with "300" range scores get £350k+ mortgages.

Go figure...

Jman123

Ah ok. So am I right in perhaps saying.

I have a very good credit history. Have had lot of loans, cards, mortgage etc and never missed a payment etc etc.

Therefore just because I have perhaps high debts and high credit util right now doesn’t therefore change the fact that I’m still a “good borrower and good payer” as such.

And therefore on top of this. Even if this takes me years to pay off - the fact that I’ve got the credit and evidence shows I’m even slowly reducing it is not necessarily a bad thing.

(I accept having any debt isn’t as good as having none of course)


And also on top of this. I'm presuming that by always making (at least) minimum payments on time without fail is probably most important factor?

[Deleted User]

Minimum is "good" and will be marked as such.
Minimum plus £XXX more is better, and again, is marked as such.

Can you not balance transfer it off?

Jman123

Can’t transfer in theory as I’m pretty much at my limit on all available cards. Theres a small swing as such. So I was looking to do a number of transfers back and forth between 2 cards to reduce the interest rates I’m paying (on one card in particular) I might have to take this route to avoid paying so much interest.

In terms of repayment. Is anything over minimum a bonus? Even so much as £5 for example??

Also. Back to my original question but maybe perhaps not focused on “score”. Have I damaged my credit history by recently building large credit card debts that are going to take 5+ years to pay off. When taking into account from today going forward, I slowly reduce my total debts and I make at least minimum repayments every month and on time.

[Deleted User]

No - the "damage" will lessen over time.

Have you tried an eligibility checker for a BT card?