Credit rating etc

Daisydoo69

Hi

I got myself in a financial mess 5 years ago, I have negotiated paying my debts.

I am working hard to improve my credit rating and have a couple of credit cards now that I make sure are paid on time etc.

Will the debts that I got 5 years impact on my credit rating until they are paid off etc, or do they 'fall' off the list at some point, I would like to try and get a mortgage at some point later on this year, but want to make sure I give myself a fighting chance etc

Thanks

D

eskbanker

Much will depend on exactly what happened and how this is all represented on your credit files, i.e. are some or all of these accounts defaulted (or even CCJ), or arrangements to pay, or just slowly repaid while still complying with contractual minimum repayments?  The former will stay on the record for six years....

Brie

Your rating is immaterial as the banks don't look at it.  What they want to see if your credit history.

Any cards you have and money that is owing, assuming you are no longer using them, should drop off your credit history after 6 years (England and Wales).  You should declare them if you are still making payments when you apply for a mortgage as it all comes down to affordability.  

Have a look at your credit history - via a free service, no point in paying for it.  Check what's on there and what's not.  Look out for other debts you might not know about - CCJs for parking charges for instance.  Also be aware that anything that you pay over time - motor or house insurance, phone contract - shows like a loan with a balance owing and how much more you need to pay off.  If you need to renew anything see if you can pay it off in one go.  Also be aware that use of your overdraft will show as well.  If possible CCs should be paid off in full each month unless you are on a 0% balance transfer offer and then you should ensure you are paying at least a bit more than the minimum.  

Ensure also that you are registered to vote as that makes you look more stable and therefore a better risk. 

Hope that answers your question but if not ping me back.  

Daisydoo69

Thanks for getting back to me, I don't have any CCJ or a overdraft, I haven't paid off the balance on my current credit cards, they are hidden away, and I make sure I make payments on them every month. I am on the electoral register 😊

Nasqueron

Daisydoo69 said:

Thanks for getting back to me, I don't have any CCJ or a overdraft, I haven't paid off the balance on my current credit cards, they are hidden away, and I make sure I make payments on them every month. I am on the electoral register 😊

lt won't really help your credit rating to be holding a balance on the card and not paying off in full every month - it looks like you are living beyond your means. The way to improve your credit rating with a credit card is to spend only what you can afford and pay if off in full every month.

winkowinko

Perhaps a silly question, but I currently make use of a 0% £500 overdraft facility from my current account with Barclays. I am essentially permanently overdrawn because I use that £500 to earn interest in a savings account elsewhere.

Would this show up negatively on my credit history?

Nasqueron

winkowinko said:

Perhaps a silly question, but I currently make use of a 0% £500 overdraft facility from my current account with Barclays. I am essentially permanently overdrawn because I use that £500 to earn interest in a savings account elsewhere.

Would this show up negatively on my credit history?

Use of OD does flag up to lenders as a negative yes as you are borrowing money on credit, even at 0%. If applying for say a mortgage it would be wise to have it paid off