Best way to pay back immature credit card debt

jermaindefoe

Hey, as I am starting I shall set the scene. Imagine a 18 year old, with a credit card, that spends all the money and when it comes to repaying has a lot of problems, doesn’t pay all the time by missing payments and paying late, and now has a sum left to pay and is on the minimum payment plan per month.

Well that was me, 5 years ago, and I still have a figure left to pay. The thing is I am not quite so stupid anymore; I do pay the minimum but always pay on time

What I am interested in is, as my credit rating is obviously going to be as bad as you can get, what’s the best way to pay the sum back, bearing in mind I have the sum total in another bank account now.

Do I, get the monthly charges put back to the normal limit and pay each month with a little extra, or, do I pay it all of in one go? I ask this because I want to increase my credit rating (damage limitation) as best I can

Regards

BigCraigJohn

You remind me of myself, I will say 1 thing, you may be shocked by your credit rating, mine was 400 out of 1000 8 months ago which is poor, I got my head down paid some debts and kept on top for that time, its now 999 out of 1000 and excellent, better than 70% of the population. Providing you have no serious defaults, are under limits and have kept up payments your score should be ok.

Just pay the lot off, will make a large difference to your credit score and save you money. As for repairing your score, youve probably gone a long way towards it, maybe use the card and pay it off at the end of the month and reduce the limit to £500 or something as this reduces your available credit and pushes up your score.

I'm nearly there now and will be paid off within 6 months and have transfered to a Ulster card which is 0% for 6 months with no fee. Was shocke dto get accepted.

I'm not expert on the matter, just speaking from personal experience.

jermaindefoe

BigCraigJohn wrote: »

You remind me of myself, I will say 1 thing, you may be shocked by your credit rating, mine was 400 out of 1000 8 months ago which is poor, I got my head down paid some debts and kept on top for that time, its now 999 out of 1000 and excellent, better than 70% of the population. Providing you have no serious defaults, are under limits and have kept up payments your score should be ok.

Just pay the lot off, will make a large difference to your credit score and save you money. As for repairing your score, youve probably gone a long way towards it, maybe use the card and pay it off at the end of the month and reduce the limit to £500 or something as this reduces your available credit and pushes up your score.

I'm nearly there now and will be paid off within 6 months and have transfered to a Ulster card which is 0% for 6 months with no fee. Was shocke dto get accepted.

I'm not expert on the matter, just speaking from personal experience.

does anyone else have an insight on to what would improve the credit rating the most, paying it all of in one or monthly at above the intended limit?

BenL

Are you paying interest on the balance?

I would personally pay it all back if you have the money and you ar epaying interest.

If you are not paying interest keep doing the minimum or more and have the other money still set aside.

Going back to the start again, if you pay it all off then use it once or twice a month to keep the balance changing and paying it off. You will then be back in the cycle of upto 56 days interest free - the ideal place for a credit card.

This good usage and paying back each month will be reported the the credit reference company and the overall balance will be low.

If you have no intention of staying with the credit card company for a long time you may as well reduce the credit limit so other companies will see your overall possible credit exposure is low.

jermaindefoe

BenL wrote: »

Are you paying interest on the balance?

I would personally pay it all back if you have the money and you ar epaying interest.

If you are not paying interest keep doing the minimum or more and have the other money still set aside.

Going back to the start again, if you pay it all off then use it once or twice a month to keep the balance changing and paying it off. You will then be back in the cycle of upto 56 days interest free - the ideal place for a credit card.

This good usage and paying back each month will be reported the the credit reference company and the overall balance will be low.

If you have no intention of staying with the credit card company for a long time you may as well reduce the credit limit so other companies will see your overall possible credit exposure is low.

well the card has actually been cancelled so i cant use it any more, tbh i will be starting university next year so i dont really want any more credit, i want to get a good job in computing from university, and by the time i graduate be in a position to be looking to get on the property ladder (get a mortgae with my gf). The problem is, im sure by paying it all of in one its going to hinder me, as it doesnt show the banks that i am capable of paying over a sustained period, however the one payment clears the debt, but then i will be considered a liability still wont i?

i really am worried by this

poppyangel

I would just pay it all in total then you can start again with a clean slate.