How long before removed defaults improve chances of credit

moorw003

Hi,

I suffered a financial meltdown in 2018, which resulted in 3 defaults all landing on my account in April and May of that year. The last 6 years has been difficult, as I basically haven't been able to get any high street product in that time, instead relying on credit builder credit cards, and a far from ideal car finance rate.

That being said, I've looked after my finances in that time, haven't had a missed payment in 6 years, and my income has gone up considerably in that time.

Today is the 6 year anniversary of my final default (25/05/2018) and I logged onto Experian this morning to see my default gone, and my score rise from 540 to 760 overnight. Obviously, it's an important moment physcologically to see a clean file in that sense.

I know the score means nothing, but I am curious as to if and when better deals might become available. This morning, the deals available were exactly the same as a month ago (a Marbles card I have no interest in whatsoever, and a loan at 35%). 

This suggests to me it's not going to be instanteonous, so I am wondering what peoples experiences are when their file clears. Does it take a while to filter through/things to update or is it suggestive that actually, it won't change much?

I'm not actively looking for credit, although a credit card to replace the aqua I've had for 5 years is on the shopping list in the next few months.

adamp87

In theory you could say immediately the benefit to your report will be, but given each creditor will have their own criteria it's not a given.

Once all defaults have dropped off, might be worth leaving it a month or two to let them settle and absolutely be removed from the files, then have a look.

You can always do soft searches on the creditors websites now and see how you fair.

ManyWays

I suspect it depends what other problems are left on your report. High credit utilisation and/or more recent missed payments?

moorw003

I have 0 missed payments over the last 6 years. 24K of debt, 13k on the car, 11k on 3 credit cards with combined limits of 17k so that's a utilisation of about 76%. Income of just under 60k.

I'm under no illusions my credit situation is perfect. It is not and the utilisation is too high. But I'm hoping the dropping of the 3 defaults will make what is available slightly more attainable. Day 1 that appears not to be the case, I was just asking whether it takes a little time or if what I see now is the forseeable future until I bring the debts down a bit!

In truth I probably messed up in dealing with the defaults. They stemmed from overpsending at univeristy and I couldn't pay it back once I graduated. But I paid all the defaulted amounts back within 3 years. Hindsight says I shouldn't have been so hasty, as paying back didn't help me get credit, and it has meant the debts I do have now are higher than they otherwise would have. Alas, they're gone now so the only way is up.

Nasqueron

You should also keep in mind any additional borrowing is seen as debt + debt e.g. a consolidation loan of £24k would be judged based on if you could service £48k of debt as you could spend the £24k on a hot tip at the 3:30 at Kempton and lose it all - they cannot force you to pay the debt off.

I would keep an eye on offers but equally consider the impact on your total debt

maxximus75

I would say after one month you should see things stabilize.

stewartwilliams

At the end of the day, is depends on what you're after.

I've got 1 default against me which shows up on all 3 credit bureaus.  Drops off at the end of next month.
3 CCJs issued by Erudio (Drysden Fairfax?) from student loans (dated 2019/2020, graduated in 2002) that only appear on Experian

I got a few credit card offers a year or so ago.  Capital 1 and Marbles.  Pre-approved through Clearscore.
Interest rates not amazing, but then again, if you want to rebuild credit, and pay off the balance, it doesn't matter if it's 0% or 50% interest.  
Had a go at the Capital One card and got accepted with a £200 limit.  Rubbish yes, but I used maybe 40-50% of it for petrol / shopping, paid it back each month, and have had a couple of increases since, so it's more useful now.

Something like an Avios earning Amex card (or Barclaycard) would be nice, but I'm not earning say £35k/year and realistically, I wouldn't even attempt applying until I build up a decent, and cleaner credit history with what might be classed as sub-prime cards.

I personally don't trust myself to apply for anything else at present.  I know fine that if I got a credit card with say a £3k limit, "ooh a new tv", holiday etc. and I'm back to square one.
I can control what I have now and I want to remain within my means.  I learnt the hard way from my time at Uni onwards what overspending does when you get "free money" from credit.

But that's me.

76% utilization is quite a bit to be honest.  No idea if that looks bad to companies even with a decent salary?
But from these forums, there's a lot of people with high 5 and 6 figure salaries, who spend beyond their means, to have lifestyle they believe to be fitting of what they earn.