GF's horrendous credit rating - needs solving!

DannyS_2

Hi,

Right need some help for my girlfriend !

She has horrendous credit rating [no bank will even give her a bank account !] mainly because when she was 16-18 [2003-2005] she lived by herself in a flat she couldnt really afford but had nowhere else to go. As a result she owes money for council tax [nearly a years worth], mobile phone, local water, electric company and a catalogue credit card. She isn't sure how much exactly she owes, but she never got any summons or balliffs after she had moved.

She has a barclays account still which she has a OD of £1000 on and pays about £20 a month because of this after some agreement with them.

What I would like to know is where to start on trying to repair her credit [is this even going to be possible?] as eventually we are obviously going to want to purchase a property together [i have a mortgage on my flat at the moment] etc etc. Also if she moves in here and I put her on the council tax, is this going to affect me in anyway?

Desperately need help and no where to start, she could get out of her £1000 OD within a year, but is there really much point if there is so much 'black' on her credit rating?

Cheers!

MrsTinks

Right firstly she won't affect you unless you have joint financial products. You have to by law put her on the council tax as you won't be entitled to a single occupancy discount any more...

She needs to address her council tax arrears asap - this is by far the most serious of her debts and one that will NEVER be statute barred. If they find her and she makes no attempt to re-pay it is the only debt you can still go to prison for so this is serious! It's also one that the councils are quick to send to bailiffs...
So - she's better of contacting THEM and trying to make arrangements.

Is there any piont in getting out of the £1000 debt? yes... sooner or later she needs to get out of all of it! Her credit rating however will be bad for several years to come. The quicker she sorts out all of her debts the quicker it will get better.

Get her to put together a full SOA and we'll have a look at how best to attack it - it may be that a DMP is the way to go

DannyS_2

Many thanks - the council tax thing does worry me, if she is living here [she maybe moving in soon], the balliffs etc cannot take anything from my property surely?

Apologies, what is a SOA and DMP?

DannyS_2

Sorry just bumping this as it got lost!

beer_tins

As far as I know you can call your council and tell them "someone" is/has moved in and that you need to pay the full rate. I don't think you need to name other occupants as long as you are paying the correct rate.

SOA = statement of affairs, there is a link at the top. It's like a budget sheet. If she/you post it others might be able to advise.

DMP = Debt Management Plan.

She needs to clear the council tax debt, then the other debt. You can then work on repairing her credit rating, by getting her on the electoral roll (if she isn't) and getting "sub-prime" credit cards etc. She would obviously need to make sure she pays those off and doesn't miss any payments.

DannyS_2

Many thanks! We're not actually sure of her exact debts as nobody has contacted her since she moved out of the property in 2005. Is it really worth chasing up some of these debts if they arent contacting her? She isnt on electoral roll but has mobile contracts and her barclays account in her name and being posted to where she lives.

Is it worth getting her Equifax and Experian credit files too, to confirm where her blackmarks are? And then how do we go about settling debts? I do think its important to sort it now, as a 20-something year old woman she probably has the most flexible spending she ever will [about £450 a month after all her bills and essential outgoings.]

beer_tins

I would definitely get her credit files. At £2 a pop it's well worth it and you can see her black (I would call them "red"!) marks right away.

Personally, I would say she should contact the council in the first instance. This debt is the most serious and needs to be taken care of first.

As for the other debt, if they don't contact her within 6 years (can someone confirm this?) the debt will become unenforceable. However, the black marks will remain on her credit records for a further 6 years. I can't say whether you should or shouldn't contact the companies, it has to be her choice, but of course there is a chance they will find her, even if they don't know where she is now.

To settle the debts, you will need to contact the companies directly. Bear in mind that the debt might have been sold on, but details of who currently owns the debt should be on the credit report.

If it was me, I would pay off the council tax debt first, then contact the other companies one by one (if they hadn't contacted me at that stage) to arrange settling the debt.

Like I said before, it will take 6 years for the bad debt to drop off the credit report, but she should find it much easier to get credit about 2-3 years after it is paid. I would also advise her to go on the electoral roll before she applies for any credit. It really does help her credit record.

Good luck.