Improving Credit Score DMP

mick1234_2

Hi,

I am currently in a self managed DMP. 

This is what is with debt agency's.

CapQuest - £2466  
PRA - £13,000 - Split over 2 accounts 
Loan - £8000 

I have 1 credit card left which has a limit of £2150 but it is at 0 spend do I keep this ? 

My question is I want a mortgage at some point I know its going to take time, in the meantime I am saving for a deposit so when I'm able I will have more to put down, what do I do to help improve my credit score is it worth getting a credit builder card, just for day to day spending ? I know it's a while off but I'm thinking whatever I can do now for the future is a good thing, my last default was 10 months ago. 


thanks 

sourcrates

Your credit score isn`t a thing in this country, the number you see is for your eyes only, you are scored using a creditors own algorithm, to which no one else is privy.

What you can do is keep a good credit history, if you have recent defaults from debt management, then a main stream mortgage will likely be out of reach until they have cleared your file, which will be 6 years in total, although further down the line, a good mortgage broker may be able to obtain subprime lending for you, but it would undoubtedly be costly by way of interest rate.

Its the defaults that will be the problem, maybe wait until they have gone.

EssexHebridean

Just focus for now on clearing the debt you have and ensuring that you keep your budget updated and stick to it. Allowing for your relatively recent defaults, you have a fair bit of time before a competitive mortgage deal will be within your grasp, so don't worry about anything apart from just learning to live without credit for the time being. As Sourcrates has already said - "Credit Scores" are essentially a fictional thing anyway - which is why all the credit reference agencies use different number structures for them! Ignore the numbers, concentrate on improving the history which is what REALLY counts. 

As for the cleared credit card - it really depends whether a) you trust yourself not to use it and b) whether you have a decent emergency fund in place. 

mick1234_2

Hi, 

thanks both, @EssexHebridean the credit card I have has been unused for months now, my budgeting is really good now and I do not relay on any credit, sometimes I may dip into my emergency fund but then replace it the following month, I just didn't know if it was worth using the card as a day to day spender, like if it has any benefit a lot of the blogs on this site talk about improving credit by using and paying it back.  

EssexHebridean

That dipping into the EF is something to keep an eye on - remember why it is there - for an actual emergency - so think -
- Fridge dying
- Washing machine needing repair
- tradesman visit required for something like a lock-change
- work needed to a car or other vehicle that couldn't have been foreseen and isn't covered by money budgeted for vehicle costs.
If it's being dipped into for more general expenses then see that as a warning sign - and perhaps put the money into a type of account where you will be less likely to "dip" - a limited access savings account of some sort perhaps.