Hi all,

Im in a right state here and not sure what to do. I am 20 years old and up until about 6 months ago, I had a good credit rating. I have a small loan with the bank that I pay back each month by direct debit and also a small credit card which I also have a direct debit set up for.

Now, I had a phone contract that I wanted to get rid of so a friend said she would take over the phone and pay it monthly from her account, which she did for a few months and all was ok. But now, she has missed payments on the contract totalling it up 267.00. The contract is still in my name so obviously its going against me. She is a single mother and she is paying me back money here and there when she can afford it, but because Im in a bit of a mess at the moment I cant afford to pay the whole bill off until the end of the month. After October 09 - the contract ends anyway.

Im just so worried though because I heard that for every missed payment that you have on a credit agreement, it stays on your record for 6 years!! My boyfriend told me that my credit rating will get better once I pay it off but I dont want that against me for 6 years. Im going to want to eventually move out and find my own place but how can I even start looking at mortgages until im past 26?! Thats too late for me and Im just really, really stressing about it. Im no longer friends with this girl just because she really had put me in the sh*t.

Is there any way that once I pay this debt off in full that I can get my rating even better? I just dont want any markers against my name or anything :(

Any ideas? Thanks x

Hi Sophie

Is the phone contract actually a credit agreement? If not, I don't think it will affect your credit rating, it will simply be missed payments on a direct debit agreement.

I suggest you get a copy of your credit report (you can get them from Experian and various other places for a couple of pounds). You will then be able to see exactly what is on it and what your overall credit score is. The missed payments by your friend/you (if relevant) will be balanced to some degree by your good record at paying your loan and your credit card. If you will have paid off the phone bills at the end of the month, then I would wait until a month after that before ordering your report - if it's on there then once that is paid off it should show up as "settled". I imagine the fact you've actually paid off the debt will be a good thing relatively speaking and may also help to balance up any negative scores that have been clocked up when payments were missed.

Hope it doesn't look too bad - I'm sure as long as you can show some "good" credit behaviour over the next couple of years you won't find it takes 6 years before you can get a mortgage! You can also apply to have a note put on your credit file to explain any negative circumstances. It doesn't change your actual credit score, but is available for anyone that is doing a credit check on you to see.

Jo