Rebuilding Credit File

MattHun23

Hi All,

im 25 and I’ve been a bit of an idiot with credit the last 2 years or so. I’ve got 2 credit cards which are being paid off within the next couple of months, my problem is I’ve had at least 40+ bank accounts in the last few years and this has impacted my credit file. I’m looking at trying to obtain a Mortgage and a new Car (Previous one stolen last year).

does anyone think that this should cause me any issues in the next year or so if I refrain from applying for any type of credit? I have a perfect payment history, No CCJ’s or defaults and not Bankrupt.

Thanks all

MattHun23

Should also say I’m not looking at a Mortgage for at least another 2 Years, I recently started working for a Conveyancing Solicitor which had opened my eyes to having good credit

NewLeaf1986

Close all of your accounts except for your longest standing credit card, longest standing current account, and longest standing mobile / landline contract.

Close off everything else and leave well alone until you are ready to buy a house.

Don't ever dip in to your overdraft, and if you do ever use the credit card you keep open, keep the balance below 33% of its limit and clear it in full each month.

And of course, don't apply for anything else in the mean time.

Stick to all that and you'll be in a very strong position 12-24 months from now

... Buying a car on credit will reduce the amount you're able to borrow against a mortgage. You're usually able to borrow 4.5x your annual salary if you don't owe anything elsewhere, but any credit commitments you will have at the time of buying a house will reduce the amount the lender is willing to lend you.

You might be better off buying a banger outright until you've bought a house, then finance an affordable better car. 

ratechaser

Wot Newleaf said... with one suggested amendment in that you maybe keep 2 current accounts open (across different banking groups) - even if not using one, the general view here seems to be that it's useful to have a backup, as banks do tend to get spooked easily these days and close accounts for often fairly innocuous transactions - useful to have insurance against that happening so you're not left without any banking facilities.

Ordinarily I'd say the same about credit cards, backups can be useful, but in your case I think one credit card plus a debit card (or two) is enough for now...

Good luck, sounds like you are close to getting yourself up straight!