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Defaults after 6 years

5 replies 161 views
Hi everyone,

I have 5 defaults on my credit file from 2017 and 2018. Since then I have managed to get much better control of my finances and I'm slowly reducing my debt. I've not missed a payment since my last default in December 2018. I'm wondering if - all things going to plan and not missing any payments and having no debt - after 6 years my credit file will be strong enough to look at getting a mortgage? It's only just under 4 years away which will give me time to clear any outstanding balances and then put sooner money aside for a deposit. But I'm unsure if it's too simplistic to think that after 6 years I'll suddenly look attractive to lenders? Am I missing something?

Replies

  • finalfantasistfinalfantasist Forumite
    47 posts
    10 Posts Name Dropper
    It depends.  If the only credit accounts are the defaulted ones they'll disappear at the 6-year mark with all your payment history so you may end up with a thin file which isn't going to be much better than what you have now.

    If you have some other non-defaulted accounts then that obviously won't be a problem.
  • Kauto5Kauto5 Forumite
    22 posts
    10 Posts
    Thanks for the reply.

    Yeah I now have some new credit accounts, 3 credit cards that in up to date with and in control of. None of these cards have had missed payments or defaults etc
  • MalMonroeMalMonroe Forumite
    1.7K posts
    Sixth Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭
    Hi,

    Many of us have had financial troubles. My husband just up and left me with our young daughter to care for and of course although he did help a bit with our finances, we struggled and I was mortified when I went into debt for reasons beyond my control.

    I did manage to recover and so will you. I went from being someone who had a few credit cards and storecards who worked only part time and was used to spending without thinking, to someone who had to get out and get a full time job and learn how to budget. 

    If you're able to put money aside for a deposit to buy a house, that's great. And lenders will of course look more favourably on you, the higher the deposit you have. But there are also mortgage brokers who can help people who have struggled in the past. But anyway, there's some time to go before then and you seem to be on the right track. Just keep on doing what you're doing. I don't think you're being simplistic, you have a goal and you are now aware that you need to keep your finances under control.
  • Kauto5Kauto5 Forumite
    22 posts
    10 Posts
    Thanks Mal, really appreciate the positivity and support of your post! 
  • Fighter1986Fighter1986 Forumite
    621 posts
    500 Posts Name Dropper
    ✭✭
    It depends.  If the only credit accounts are the defaulted ones they'll disappear at the 6-year mark with all your payment history so you may end up with a thin file which isn't going to be much better than what you have now.

    If you have some other non-defaulted accounts then that obviously won't be a problem.
    A thin file doesn't bother mortgage lenders as long as you tick the basic boxes:

    No adverse credit (arrears, defaults, CCJs, Insolvencies) in the last six years
    Registered to vote
    Not in any debt
    Don't use overdraft
    Have 15% deposit
    Have a permanent salaried job
    Asking to borrow under 4.5x your basic annual salary
    Are British or have indefinite leave to remain
    Have been here for at least three years
    Have a UK bank account 
    Have no history of fraud
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