Help becoming debt free wanted

parrapa

Hi all

I am after some help to clear my debts and my bab credit record.

I have in the region of £5k of debt remaining, that I mostly have arrangements made to clear them off over a long period of time. In the past my credit record has been far from good, and it took a long time for me to realise but I now want to clear it all up once and for all.

I have a decent job, rent a room is a friends house, but have just got engaged to my girlfriend and looking to move into somewhere with her. It would both me our first property.

Basically I am after advice on clearing up my credit record to apply for a mortgage in the near future. If I was to clear all these debts would it also clear my credit rating and make it look a lot better, or would it make no difference that just continuing to pay the arranged amount. I aslo have around £1000 of a CCJ to pay off, and would like this off my record as soon as possible, so any advice on that would be of great help as well.

After realising my mistakes i now want to clear everything off and get myself back on track as soon as possible, any help on this would be great.

Thanks for reading :beer:

Airwolf1

The sooner you can clear your debts the better, and then you can try to work the other way and try to make your credit record improve, eg by having a credit card but clearing the bill in full by monthly direct debit.

parrapa

Thanks for that Airwolf, as I cant afford to pay it all off at once, would consolodation be favourable to me in helping me to get a mortgage in the near future?

Airwolf1

If you're looking for a mortgage in the near future, this would really depend on how bad your credit file is, and also the size of mortgage required compared with value of house.

It may be worth your while in getting copies of your credit reports from the 3 credit agencies. This google search may help you, check the list on page 1 out. I assume you can't balance transfer cards onto interest free cards etc to help you out? Without knowing a bit more it's hard to help much more really.

I'm just concerned that you say your credit record is far from good, and that you want a mortgage. I was speaking to someone who is head of mortgage department for a bank yesterday, and underwriters are being very cautious at the moment.

Airwolf1

Sorry, forgot to give the google search link, it is here.

chevalier

there are some steps that will help improve your credit record. The most obvious is to stick religiously to the payment plans you have in place already. Also being on the electoral roll will also help it improve.
chev

parrapa

So am I right in saying that sticking to my payment plans will improve my credit rating, or would it be better to get a loan to pay them off and make sure I stick to that?

Cheers for the info on the credit file stuff, will get all this together so I can give you a clearer picture.

Thanks again

Airwolf1

When you say get a loan...are talking secured or unsecured? How much do you owe on the payment plans, and if interest is accruing, what is it? What would be the interest rate of a loan?

parrapa

Sorted out my credit report over the weekend so will post full details here later, basically turns out I owe £5,600 in debt, of which most of that is in default. I would be looking at an unsecured loan so suspect the interest rates on it would be quite high, and that would be provided I could get a loan! Will post full details later though, thanks again

annamc75

In my opinion, more credit when you have a bad credit rating is not the way to go. You will only prolong the debt that you have and end up possibly paying more due to poorer choice of loans because of your bad credit.

If you have payment plans in place for the debts you have then you should really look to maximise income that is coming in so you have money to pay these off quicker.

1.POST YOUR SOA - we really need to see what is coming in and going out - you will be amazed at what people can trim off a budget here! You can find the link all over the posts here but the website it comes from is makesenseof cards.

2. Claim back any charges that you are entitled to claim back (if you get these then pay them directly to the highest APR debt you have).

3. Earn money - the more money you have the quicker you can get rid of these debts without having to take on more debt. If you are working then the amount of debt you have is fairly small and is certainly manageable as you are not paying secured debts. The fact that you already have payment plans in place suggests that you have extra money in your budget to do this.