pay credit cards or debt collectors first?

Ginphil

Hi all, Im looking for some advice, I have got £7k worth of credit card debts which im managing to pay off, but i also have have £1200 worth of debts with a debt collecting agency. I have a payment arrangement with them to which im paying and am up to date, but every month they are registering a default on my credit file, I have spoken to them about this and they say this will happen until the debt is cleared. Should I focus on clearing that debt from them or the credit cards?

Cheers in advance

MattMattMattUK

Ginphil said:

Hi all, Im looking for some advice, I have got £7k worth of credit card debts which im managing to pay off, but i also have have £1200 worth of debts with a debt collecting agency. I have a payment arrangement with them to which im paying and am up to date, but every month they are registering a default on my credit file, I have spoken to them about this and they say this will happen until the debt is cleared. Should I focus on clearing that debt from them or the credit cards?

Cheers in advance

Focus on the debt with the highest interest rate.

RAS

AP markers aren't a lot better than defaults.

But they damage your credit record for far longer, as they stay on your credit record for 6 years after the debt is cleared.

Defaults come off after  6 years regardless of whether they are paid or not. 

So if you want to reduce the damage to your credit record, stop paying anything beyond the minimum on your other debts, and put every to clearing the debt with the agents.

Then see if you can boost it with a bit of car-booting, vinted etc?

sourcrates

Both credit debts are what we term "non priority debts", just to make that clear, your focus should be on your essential outgoings first, such as mortgage/rent/council tax/utilities/food/etc, as they are a priority.

Now, the debt with the DCA, obviously at some point this account defaulted, the default date will be shown clearly on your credit report.

That default will show for 6 years regardless of what you do, paid/unpaid/ignored whatever.

What you see recorded on your file each month is a status update of that default, and it will be reported as such until the 6th anniversary, when the whole entry will drop off your file.

The defaulted debt will not be accruing any interest or charges, as that all stops when an account defaults, however the credit cards will be accruing interest, so I would say focus your spare disposable income on them first.