AIBU to think when I pay it off it’ll get better?

[2020cansuckmyass]

I have AWFUL credit. Due to years of stupidity, up until very recently. I have lots of outstanding things on my credit report such as overdrafts, payday loans, catalogues etc and can’t get accepted for ANYTHING at the min(not that I want too, just put that so you know how bad it is).
I have just last month started paying what I can afford on them and estimate I will be clear within 3 years.

Will it be possible to improve my credit rating and get a mortgage in the future?

Anyone being through similar?

I think so, one of the things that builds your credit rating is regular and reliable debt repayments. Well done for facing up and making a start.

Three years isnt the end of the world. Make an appointment with your bank post Covid and get them to go through everything with you. Not to consolidate loans as such, but just to see if there is a way of getting rid of the high interest stuff quickly.

Your credit rating will improve while you're paying it off. Been there. One of the things that really helped was a loan from my bank specifically for when you've gathered credit cards. My interest was massive on credit cards and I used the loan to pay off the cards so now i just pay the loan back and the interest is miles less

CCJs and defaults stay on your record for 6 years. They drop off after that

As long as you’re not missing payments, getting CCJs etc, then after the debt reduced you’re credits score should improve.

Yes as pp said, it will gradually get better as you pay things down and demonstrate regular repayments and after 7 years none of what is there now will be visible.

It’s great that you are paying what you can afford on everything but do make sure, if you have any extra, that you are prioritising your repayments in the right way. It’s usually a good idea to pay the min payment to all loans and then as much as you have left off whichever one has the highest interest (for you likely to be payday loans). Then when that is completely repaid, pay the extra off the one with the next highest interest and that will clear faster as you will have more spare from one less loan to pay. It makes a big difference to the total interest you pay if you are able to do this.

Good luck and well done in deciding to tackle this.

What really makes the difference is adverse data ageing and dropping off your file. In the meanwhile, concentrate on your current payment commitments so that there will be positive, recent data when the bad stuff drops off.

I racked up lots of credit card debt when I was younger and had terrible credit, including a default on a phone bill that has haunted me for years. I'm not completely debt free yet but I've recently been approved for a mortgage, even with the old default on there. It will take time but there is hope.

I really recommend Clare Seal's book Real Life Money, there's practical stuff in there but also lots about moving on from the guilt associated with debt. I found it incredibly helpful in changing my mindset.