Best way to build good credit history

adamj1984

Hi All,

Long story short I acted like an absolute fool financially from 2001 to circa january 2020, abused every bit of credit i recieved, took out loans with no intention of ever paying them back etc, you get the picture.

Fast forward to 2020, I had a lightbulb moment, I am now 3 months (3 payments) from being completely debt free, but my credit file still reads as someone running from debts as I did.

I know the scores are irrelevant - but just to put into context my current equifax is 110, and experian 457.

CCJs - both fully paid off
1 expires 12/1/2022
1 expires 27/11/2024

Defaults - again all now paid
1 - expires 18.12.2021
2 - expires 12/03/23
3 - expires 1/11/23
4,5,6 and 7 expire between june and december 2025.


Things I have done to improve credit file
1. Checked electoral roll and address all up to date
2. Took our credit card beginning of March, Used £20 of the balance, let the statement go out then paid it - only reason for the CC is to get the positive history on my file, i dont actually need it.
3. Started a Loqbox @ £40 per month

I stopped searching for credit last Jan when I had the lightbulb moment, other than the credit card (did eligibility check first and was 100% guaranteed).

Is there anything else I can do? I want to buy an house sooner rather than later but for all the above reasons I have zero chance at present.

Thanks In advance

Adam

adamj1984

ok so I have realised I have posted this in the wrong place, How do i move it? 

Any help appreciated

Jami74

adamj1984 said:

2. Took our credit card beginning of March, Used £20 of the balance, let the statement go out then paid it 

Set up a direct debit to pay this card in full every month. Then continue to use it for small purchases that you would spend anyway. Don't get caught up in utilisation numbers or anything else. £20 is fine.

 Good credit history = good credit behaviour x time.

You can't increase good credit history by behaviour only, it's the time bit that is important. In my experience time = months.

adamj1984

Jami74 said:

adamj1984 said:

2. Took our credit card beginning of March, Used £20 of the balance, let the statement go out then paid it 

Set up a direct debit to pay this card in full every month. Then continue to use it for small purchases that you would spend anyway. Don't get caught up in utilisation numbers or anything else. £20 is fine.

 Good credit history = good credit behaviour x time.

You can't increase good credit history by behaviour only, it's the time bit that is important. In my experience time = months.

I would definitely takes time = months, I was afraid it was going to be time = Years, at the rate I have been paying off debts (once debt free money is going towards house deposit) I reckon financially I will be in a position to buy an house by next december (ish).

Thanks for the response Jami, much appreciated.

macman

No mainstream lender is going to want to lend to you until the second CCJ falls of your history, so buying in December '22 seems decidedly optimistic. 
However, that gives you 3.5 years to save for your deposit and burnish your credit history as advised above by showing timely repayments on the CC.

adamj1984

macman said:

No mainstream lender is going to want to lend to you until the second CCJ falls of your history, so buying in December '22 seems decidedly optimistic. 
However, that gives you 3.5 years to save for your deposit and burnish your credit history as advised above by showing timely repayments on the CC.

Yeah that was my worry unfortunately

guess it is going to be late 2024 then....

Thanks for responding

Mort

I would repeat what Jami74 has said regarding the direct debit payment being set up to clear the full outstanding amount and add don't be tempted to spend too much on the card, limit that to essential stuff. In my case I used it to fill the fuel tank on the car once a month, if you don't have a car something else like a bus pass could be just as good.
My credit score didn't really improve until after the last default cleared on my file which was 6 years. You may find it useful to sign up for free accounts with Experian, Credit Karma & ClearScore. They will show you how your credit score looks and will suggest cards that you could switch to, getting onto a more mainstream card with a lower interest rate will make you look better to other lenders.

MovingForwards

Time is a healer, nothing wrong with contacting a good whole of market independent mortgage broker one who specialises in adverse as they try and place you with mainstream lenders where possible instead of just going straight to an adverse lender.

Start saving your deposit and associated costs.

adamj1984

Yep thats the plan,thanks kindly guys 

adamj1984

Hi All, 

Apologies for not updating sooner, SO I have now been approved in principle for an 80% mortgage up to 100k.

So now, time to start saving like mad - just thought I'd drop in with positive update, credit report wise, they had all started improving significantly, then I got offered new job which i had to get a new car (current car was a company car) - long story short it took a battering again.

everything still heading in the right direction