When I was 18 and realised I was able to get credit/store cards I got a little carried away and did not keep up payments to various creditors. I also took out a loan and have nothing to show for any of it.

As a result of me getting carried away, all my accounts were in default and I am paying them all back now. I am 22 now and realise how stupid and irresponsible I was back then.

I am always on top of my payments now but have a really bad credit report and am worrying about being able to get a mortgage in the future. I know that there are specialist mortgages for people with bad credit but will I ever be able to go and get a mortgage in the same way a person with good credit will?

Once all my creditors have been paid will my credit report be good again?

Tanya Stagg

The defaulted accounts will be kept on your credit report for six years from the date of default and could cause lenders to fear that you’ll be unreliable in future. You need to ensure that you keep making your repayments – but I think you’ve worked that out for yourself.

An affordable mortgage is probably out of the question for you at the moment, but there are things you can do and you will be creditworthy eventually.

Credit cards and store cards tend to charge high rates of interest, so you may find it more cost-effective to clear these now and roll up all those debts into a loan instead. But be very careful. A ‘consolidation’ loan, as it is called, can also sometimes be very expensive. So check exactly how much you will repay in total as well as how much your monthly repayments would be. Because you have a poor credit history it is likely you’ll only get a loan at equally high interest rates. So only go to a respectable lender.

You should also make sure you only have access to the credit you need. You can’t remove the defaults, but you can close any credit accounts you no longer use – this includes mobile phone and catalogue accounts.

You should also make sure you are registered to vote at your current address, as lenders use the electoral roll to check your identity.

Once you’re debt-free, your default history has disappeared from your credit report and you’ve built up a positive history for a few accounts, a ‘normal’ mortgage will no longer be out of reach. If I were you I’d start saving for your deposit as soon as you've paid off what you owe. Good luck.

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