Partner of a bankrupt - credit rating question

bitemebankers

Sorry if this gets asked a lot - I have looked around and can't find the answer.

The preamble: My wife went bankrupt in March 2005, when our finances finally imploded. I managed to "escape" with a crippling agreed payment plan with my creditors. In February last year, I finally completed my repayments. I've still got an overdraft and a student loan, but apart from that, things are looking up and we've got some spare cash again.

Now my car, which is essential for work, is about to fail it's MOT, and it's no longer worth fixing. I'd like to buy a much newer car (still **well** within my budget) on dealer finance, but I'm not sure where I stand regarding my credit rating. I got my free Equifax report and there isn't anything bad on there since March 2006, when I went back onto full repayments with my last creditor.

But...every since, I've been extremely wary of getting credit on anything. I have no credit cards, no loans, no phone contract...nothing. Just my current account overdraft and a mortgage with (thank goodness) still isn't in negative equity.

My questions are: how much will my wife's bankruptcy affect my credit rating? Will the fact that I've not taken out any new borrowing for years negatively affect my rating still further? And is there anything else I should consider.

kerrypn

What is your credit score?This is what lenders go off.

Can you not borrow from family or friend instead? You have done so well it seems a shame to get credit again.

bitemebankers

Thanks for such a quick reply! I don't have the score, just the free report. I guess I'll have to get my wallet out and pay them my £15 then....?

Unfortunately nobody else I can borrow from. Nobody I'd want to ask anyway...

kerrypn

No dont pay for it! I didnt know the score wasnt on the free report sorry, I used to work at a loan company you see and they had an account set up with equifax.

You will have repaired a lot of damage by paying everything back regularly. Are there any CCJs on there-if not and everything seems in order I would try the bank first-cheaper and the hardest to get.

HTH

property.advert

kerrypn wrote: »

What is your credit score?This is what lenders go off.

Can you not borrow from family or friend instead? You have done so well it seems a shame to get credit again.

I don't agree that total credit avoidance is the best advice, unless your problems were addictive, such as gambling, and you are still not in control. In the modern world, it is going to be virtually impossible to go long term without credit. It is nigh on impossible to rent a car or book a hotel room etc. without a credit card. And just for those instances where you need emergency help.

I'd guess the OP's bank would probably give him a card without hitting his credit record but what about the Barclaycard test ? https://letmechoose.barclaycard.co.uk/

I think the OP needs to pull complete records and see where he truly stands.

brighter_side_of_life

Hi there

My friend who needed a car for work and family (they worked and lived away from home and it was their only means of getting from A-B). They werent bankrupt but their credit rating was moderate/poor.

The problem is that in the current climate getting credit from anyone is hard - even for those with a white than white credit score!

My friends only option was with First Response Finance. They charge a higher APR than the banks, however, they are very sensible in what they lend to you. It has to be affordable and manageable. They go through rigerous checks to ensure this is the case. My friend worked out a package for 3 years at £191 per month £3400 loan. That might seem a bit on the high side, but it is a reputable company AND it is a good way of paying of a small debt quickly and increasing your credit rating as you go.

Personally I am trying to avoid any type of credit. My car is due its MOT and needs some work. I am just going to fill in a sorn doc and do the work as I go - little bits at a time. In a few months it should be sorted and back on the road again. I suppose this is only possible if like me you live close to work with good public transport. I know this isnt always an option for everyone.

I wish you luck and take care. Think wisely before you borrow and make sure you dont over stretch yourself.

michael1983l

That looks like an interest rate of +40% APR if I worked out correctly. There is no need to pay this rate if your credit is ok and you can easily afford the repayments. Do you have a deposit? If you do this will make it easier to get a car loan. If you have no CCJs and no late payments in the last 2 years then I'd expect most dealer finance applications to be accepted providing you have enough spare income. On creditexpert.co.uk you can pay for a credit score at £5.99 if you have a membership. If not try the smart search on moneysupermarket, I think that goes off your score and it is free. Remember if you go to a dealer for finance it will be secured against the car, so your more likely to be accepted.

brighter_side_of_life wrote: »

Hi there

My friend who needed a car for work and family (they worked and lived away from home and it was their only means of getting from A-B). They werent bankrupt but their credit rating was moderate/poor.

The problem is that in the current climate getting credit from anyone is hard - even for those with a white than white credit score!

My friends only option was with First Response Finance. They charge a higher APR than the banks, however, they are very sensible in what they lend to you. It has to be affordable and manageable. They go through rigerous checks to ensure this is the case. My friend worked out a package for 3 years at £191 per month £3400 loan. That might seem a bit on the high side, but it is a reputable company AND it is a good way of paying of a small debt quickly and increasing your credit rating as you go.

Personally I am trying to avoid any type of credit. My car is due its MOT and needs some work. I am just going to fill in a sorn doc and do the work as I go - little bits at a time. In a few months it should be sorted and back on the road again. I suppose this is only possible if like me you live close to work with good public transport. I know this isnt always an option for everyone.

I wish you luck and take care. Think wisely before you borrow and make sure you dont over stretch yourself.

bitemebankers

No CCJs, thankfully, but a couple of defaults around 2005/2006, one of which was due to my wife's bankruptcy. I'm not a gambler or anything like that. Our finances went kaput partly because we were over-stretched anyway, but mainly because I was ill for a few months and got shafted by my employer. Anyhow, that's all in the past now and I'll just get cross and upset if I start going on about it....

The only source of credit I've tried so far is Zopa, because they claim that the tentative application won't affect your credit rating. I also liked the sound of a creditor that keeps the mainstream banks out of the loop. Needless to say, they refused me, but maybe I was being ludicrously optimistic. The APR was under 10%, which seems to be very good indeed at the moment, for a £4k loan.

What should I do next? Pay my £15 to Equifax, or just go ahead and apply to a bank, or go for dealer finance (apparently better interest and easier to get?).

Many thanks to everyone who's replied so far

confused76

michael1983l wrote: »

That looks like an interest rate of +40% APR if I worked out correctly. There is no need to pay this rate if your credit is ok and you can easily afford the repayments. Do you have a deposit? If you do this will make it easier to get a car loan. If you have no CCJs and no late payments in the last 2 years then I'd expect most dealer finance applications to be accepted providing you have enough spare income. On creditexpert.co.uk you can pay for a credit score at £5.99 if you have a membership. If not try the smart search on moneysupermarket, I think that goes off your score and it is free. Remember if you go to a dealer for finance it will be secured against the car, so your more likely to be accepted.

hiya don't pay £15 to equifax, the above poster says you can get that info from credit expert for £5.99...that would be better?

michael1983l

I think it would be wise to sign up to creditexpert.co.uk for free trial and take their credit score for £5.99 this will give you an exact credit score. If you then go to moneysupermarket it will tell you which loans you are likely to get. The more applications you make and the more times you are declined the lower your score will be. So the £5.99 will make sure you get it right first time and will be worth every penny. Just remember to cancell your subscription before they start to charge.

bitemebankers

Unfortunately, I can't sign up for the free trial at creditexpert because I already used it up last year. However, I just applied for my score from Equifax and it only cost £5.99 after all - apparently you get a discount if you're on the free trial, just like creditexpert.

Anyway, it was revealing. Apparently it all stems from two defaults in my name, one in 05 and one in 06. The later one was due to an old joint account we had with Abbey some years ago that, to be completely truthful, we'd forgotten about. It was meant to have been closed when we got rid of our mortgage with Abbey way back in about 01/02. But amongst other !!!!-ups (including the temporary loss of our title deeds) the account remained open. This wouldn't have been a problem if Abbey hadn't also tried (in error) to take a life assurance payment out of it, which bounced, triggering a sequence of unauthorised overdraft charges. The balance at default was just £190 - mainly composed of illegal bank charges. I was already aware of this issue, but I was really surprised by now negatively it's affected my credit rating. All other fields are rated perfect. But the default bit is rated very poor, giving me a "fair" rating overall - bang in the middle of the scale as it happens.

I guess it could be a lot worse. After getting turned down by Zopa, I was fearing the worst. But it seems now there maybe some hope - maybe I'm not a credit pariah after all. :rolleyes:

Many thanks to everyone who's replied. I really value your advice. I hate dealing with this stuff.