Will paying of debt l, make things worse ?

Mcgowan1988

Hi I am looking for some advice. Me and my hubby were in the financial pits of hell for years.
We had our turning point last year and are clearing all the debt. We now have this amazing 2.8 Apr loan from tsb to finish clearing everything and would be finished in three years time . 
To be completely debt free would be incredible, but I've noticed the more we have cleared like credit cards etc our credit score is plummeting. I've got around £700 spare a month and we could clear the loan in a year's time instead of three years then look into finally buying a new home, but I'm worried if we clear the tsb loan early it's gonna effect us getting a mortgage ?
People are telling me we won't look appealing to banks ?
Any advice is appreciated xxx

sourcrates

Best advice is ignore the score, pay down the debt, use a good mortgage broker when the time comes.

The credit score the CRA`s peddle, responds to change of any kind, and is not seen, or used by any lender, its used mostly as a marketing tool.

Lenders score you using their own scoring system.

Aspiration

Everyone talks about the score being made up but overall my advice would be to clear it if you can. Even if it impacts a month or two it will mean affordability looks better and usually simpler than having to explain why you want to borrow more but recently have had to borrow to meet current commitments. 

fatbelly

Clear the loan early if you can.
Keep a credit card going for shopping but clear it each month.
Any defaults drop off after six years. Then you're good to go.