Life after defaults . Will score ever improve ?

bellabellachick

I will keep this as short as possible . 
Stupidly , aged 23 having lost my job and having head in sand , i defaulted on my mobile phone , my mobile phone contract , an Argos card and my credit card . These four defaults happened over 18 months . 
The defaults were my fault and totalled £2000. Defaults registered 2015

I worked hard and paid them off years. For 4 years I could get absolutely no credit . 2 years ago I finally got a phone contract . Last year I finally got a credit builder card around 39%apr .

Since then I have learnt that if I can’t afford it , I can’t have it . I earn £40,000 a year . I save £400 a month . I am only able to rent which is extremely expensive. I can’t get a car on finance ( not that I would ) I couldn’t get a sofa or an oven on finance etc . 

No lines of real credit are open to me at all . It is so hard as I feel that 5 years on I am still stuck in a rut . The inky credit I want is the ability to get a mortgage which would be so much less than my rent . 

Anyway !! In March 3 defaults come off and then my final default comes off in October . Will my credit score improve ? Will I be able to get a mortgage ? I have 0 debt . I spend £30 a
Month on my credit card and pay if straight off. I will have no other negative markers on my file.

Will I ever be free of the shackles of my poor credit and poor choices I Made at 23/24?

Many thanks

[Deleted User]

Your credit score should drop further when the defaults come off.  But that's fine, as it's not used or seen by anyone but you.

What will actually happen when the defaults come off is that lenders will view you as less risky than when you had them.

Use an adverse credit broker when it comes to getting a mortgage, as it sounds as if you will have a thin file.  Make sure you're waiting for your credit card statement before clearing in full.

adamp87

After 5 years you’d find more credit available it’s nearly over too - it could be the current climate isn’t helping as people tighten up.

Are you on the electoral roll?

Fighter1986

Obviously having your defaults reach their six year anniversary and fall off your credit file will improve your creditworthiness.

It's only a tiny factor in deciding your creditworthiness, however. Many more things come into the mix.

Also, you can only save £400 a month on a £40,000 salary? Why? 

You'll need at least a 10% deposit to buy a house but should aim for 15% down + a good chunk in the bank to cover expenses.

OH and I are on track for 15% deposit on £325,000 borrowing + £10,000 or so left over when we start looking in April 2023. We earn about £30,000 each. I'm 34 and he is 28. 

Don't feel bad about not being able to buy young. Sometimes it's just not the right time, and that's ok. Better, even, as it gives you a chance to get a better handle and perspective on life first. 

Carrot007

With defaults older than 3 years, they are no longer the source of your credit problems.

Unless you are only applying for the best rates and expecting to get them.

If you cannot get credit then maybe you have too many outgoings or are in an area they do not like, who knows it could be one of a million things (and many of these will not be on your credit report).

You should be able to get a mortgage now. I assume you used a bad credit specialist mortgage broker to see if you could? (that will probably be a good choice even after they drop off, they don;t just get bad mortgages, they get the best for you (and make sure they are whole market)).

Of couse currently getting a mortgage is far harder than when I did. I assume you have 10-15% deposit? My first mortgage was 125% and even with 3 year old (but settled, I hope yours are settled (in full, that counts more for a mortgage)) defaults 95% was fine. These days not so much. But that's the market not you.

MovingForwards

When you say spend £30 on the CC and pay it straight off, does that mean literally straight away after using it and before the statement is produced? That will be one of your problems. You need to demonstrate handling credit eg spending on the CC, paying it the day the statement is produced or soon after. Also £30pm isn't really demonstrating anything.
Can you put all your food shopping on each month and then clear it when the statement comes out?

2013 was the start of my decline. 2014/15 things got really bad and I ended up with a CCJ, plus various defaults in 2014. Over the next few years I picked debts off before becoming debt free in 2019. I took out a sub-prime CC (very scary for me), but used it and paid it in full when the statement came out. I was offered a CC by my own bank, I took it and did the same with that one as the sub-prime CC. Last year my defaults fell off my history, but before that I did get a mortgage, albeit a sub-prime lender. My CCJ falls off this month.

All the time I was paying my debts, I was saving a lot more towards buying my home. I needed a 15% deposit. I'm now still saving consistently each month, making overpayments and paying into a private pension. I earn under half of what you do.

There is life after debt and credit blips. 

Thrugelmir

Try saving up for things you want. Rather than buy now pay later. When you are spending hard cash makes you think more than simply pulling out a piece of plastic without a thought.