Most efficient way to settle debts 20 September 2022 at 11:43AM in Debt-free wannabe 14 replies 531 views

grovertg

Hi, I'm in about 4k out of debt and am in a position to be able to sort it out soon as my husband has inherited some money. My credit file is absolutely knackered, I have a ccJ and loads of bad debt that has been sold. My house is in my husbands name and so is the mortage, so I want to do the best way that will be the least detrimental to him. We are buying anoither house next year, so I know once he applies to the bank my name will come as association. The LTV will be very small (about 25%) I just want to steer us in the right direction before we move. How can I see all my debt? Buy my credit file and go from there? If I go for settlements, what sort of % should I be offering. Also am I best keeping one of my cards with a small balance on to build my rating back up again? Thanks in advance.

RAS

What accounts do you and your husband have in joint names?

Have you checked your credit records (NOT your credit rating) to find out when these various accounts defaulted?

grovertg

Nothing in our joint names, we got a bank account when we first got married 15 years ago but never used it. No i haven't, I don;t know how to do that?

grovertg

Update, I have just accessed by credit report. I have two CCJs one from 2020 and one from 2021. I've got a credit card with 3200 outstanding on it. I'm a bit lost to be honest as to what I owe the CCjs for and what amount/debt I owe in total, or what to do with it!

Ebe_Scrooge

grovertg said:

How can I see all my debt? Buy my credit file and go from there?

There's no need to pay to access your credit reports - all 3 are available to view for free, see the guide here: https://www.moneysavingexpert.com/loans/check-free-credit-report/

grovertg said:

 I just want to steer us in the right direction before we move.

A fully settled debt will always make you more attractive to a lender than a defaulted debt or an AP.  If you're in a position to clear the debts, this would be the best course of action in terms of obtaining further lending in the future.

grovertg said:

Also am I best keeping one of my cards with a small balance on to build my rating back up again?

Using a credit card "correctly" is the simplest way to improve your credit history.  What this means is using it for everyday, planned, essential purchases such as food, petrol, whatever.  When the statement arrives, pay it IN FULL, every month, without fail.  If you don't pay the full statement balance then not only will you be charged interest, but you won't be building up as many positive ticks on your credit history.  As long as you can be disciplined and only use it to buy things that you need (rather than want), things that you can afford, and that you know you will be able to repay in full every month, then it's a simple (and free) way to build a good history.

grovertg

Thank you. I have just signed up to Experian so I can see my report. Its a minefield tbh! 2 CCJS that I cant see the details for and a credit card with £3.2k on with some late payments. I'm not sure about future borrowing, I'm just worried about how my credit score will effect my husband when we buy a new house. The house and mortgage are in his name. I'm just wondering the value of the paying the amounts I owe in full when my credit score is so low.

grovertg

I think what I am trying to say, is that whether I pay the amounts in full or do a settlement, they will still remain on my credit report for 7 years?

SusieT

It may be better to post on the mortgage forum as there are brokers on there who can give a better idea than here. I think that although the finances are separate, the fact that you are married MAY mean that they will look at you as well. 
CCJ, if there is a reference number on the report or if you know what address it would have been sent to (possibly a previous one?) you can search here https://www.trustonline.org.uk and that will give details.  
The defaults and CCJ's will fall off the credit report after 6 years from when they are dated not 7 regardless of settlement, but if you are looking to mortgage then very generally a settled one looks better than unsettled, and assuming all else is in order then the older they are the less effect they will have.

Ebe_Scrooge

grovertg said:

I think what I am trying to say, is that whether I pay the amounts in full or do a settlement, they will still remain on my credit report for 7 years?

An AR will stay on your record for 6 years.  Any late payments will also be visible to a lender, but a AR will have a much larger impact than a late payment which has been subsequently settled.

Ignore the score you see, that is meaningless marketing bumf, but the data on your file is important.

Having said all that, if you have no "financial association" with your husband (no joint accounts, joint mortgages etc.), then your credit record will have no impact on your husband's ability to obtain a mortgage, assuming the mortgage is solely in his name.

grovertg

Thanks so much. So the CCJs are 2020 and 2021.One is for a car that we sold and didn't tear the bottom of the form off so it was a DVLA fine. I then moved house so didn't know about the debt for 5 years so they issued a CCJ, the other I've no idea what it is. I know I got a tex this morning from Capquest saying a reduced settlement is available on my account?

grovertg

We're both self employed, I know you never know, but the mortgage and the old credit cards are the only lending we have atmo and we want to reduce that to just the mortgage. We've not done any borrowing for about 7 years and don't intend to do anymore. Whats an AR btw?