Removing defaults and improving credit

seville_2003 · 10 October 2019 at 1:32PM

Hello
I'm looking for some advice regarding removing defaults and trying to improve my credit rating. I made a lot of silly mistakes as a young 17/18 year old taking out overdrafts I couldn't afford and more recently a few years back using catalogues when I moved home.

I'm now trying to sort things out I've just qualified and started work as a teacher and I'm hoping to get a mortgage within 2/3 years. I already have savings of about £30k after my Dad passed this year and left me it but I think I would struggle to get a mortgage currently due to my credit rating.

I have taken out a barclaycard forward which I'm paying off in full every month, I've registered on the voters roll so I'm hoping this will help. The problem is the defaults.

I have 11 in total - 6 of them will be removed within the next 2 years.
The other 5 won't be removed from my file until 2023/24.

I was going to call the debt companies for these 5 and pay them off, then I'll only have the other 5 left which will be wiped in a couple of years.

My question is if I call and pay these 5 off will it improve my credit rating in the short-term? or will it remain the same because the default has been issued. (Will I still feel the effects of these 5 even after the other ones are wiped next year and I try to apply for a mortgage?)

And can I ask them to remove the default upon me paying it off - I had read on the site that you can ask them to do this. How likely is this?

Any help would be appreciated, thankyou

[Deleted User] · 10 October 2019 at 1:36PM

Settling defaults always looks better than not settling them, but the defaults do a lot of damage. You'll need to get them settled anyway before applying for the mortgage, unless statute barred as it will hurt your affordability.

They won't (in the vast majority of cases) remove the default as they're obliged to accurately report your status, but they will mark it as settled.

Use a broker for your mortgage, so your application gets placed correctly.

Willing2Learn · 10 October 2019 at 1:37PM

Hi,

First, congratulations on qualifying as a teacher. It is a noble profession

Second, there is no guidance nor legislation which requires a creditor to remove a default once the account is settled. You can ask them, as a gesture of goodwill, but I've never heard of anyone getting a 'good result'.

If you are looking for mortgage before the defaults are automatically removed from your credit files, then you will need to get yourself a good broker who specialises in sourcing mortgages for borrowers with an adverse credit history.

seville_2003 wrote: »

My question is if I call and pay these 5 off will it improve my credit rating in the short-term?

Forgot to say. Yes, settled defaults on your defaulted accounts are likely to be looked upon slightly more favourably by lenders than if the accounts were to remain unpaid.

Removing defaults and improving credit

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