Debt Management Companies

monstersgang

Hi everyone am brand new to the forum and need advice. I have worked real hard since last June to lift my credit rating and have jumped from 168 in July 2009 to 633 in January 2010. Though I am still borrowing every month but I am making payments regularly and on time. My problem is I am finding it very difficult and debt management companies keep contacting me - it is very tempting. But I want to clear my debt, my aim to lift my credit rating so I am able to qualify for a loan so I can clear the debt on my own as I am responsible. I have been advised to use these companies by friends but I dont want lower payments that will last longer. I AM CONFUSED, please help.

RAS

If you do a DMP, it will affect your credit rating. Most creditors will default you and it will take 6 years for that to drop off your record.

Do an SOA and we may be able to help you.

bargainbetty

I agree with RAS - if you put up a 'statement of affairs' peopple here will help advise how you can save money and pay off your debt more quickly.

If you do go to a debt manager, please only ever consider using CCCS or Payplan - they do not charge you for doing it. Commercial companies might offer to organise it, but they will take a slice of your money every month for doing it - money that would be better spent on your debts!

Best of luck x

GeorgeUK

If you are managing to meet the minimum payments then there may be better ways of tackling the debts and making paying them easier rather than a DMP.

Can you post up a statement of affairs for us to look at?
http://www.makesenseofcards.com/soacalc.html

monstersgang

Thanks RAS, bargainbetty and GeorgeUK responses. My current situation is approx - loan 1 £7000, loan 2 £3700, loan 3 £1800 (this loan will be paid off at the end of this year:o). However my biggest problem is my credit cards - Barclaycard £5600, MBNA £2400, NatWest £1700 and a Vanquis which I took to improve my credit rating. The limit is £500 and I pay this card off in full each month but then I use the card immediately put cash back into my account to live on each month. I am desperate to get the credit rating up so I can take out a loan to clear all the credit cards with a low monthly payment. All the other cards are cut up to prevent use bit I still feel overwhelmed as I want the credit card debt gone and I am afraid to apply for a loan yet as this will affect my credit rating !!!

GeorgeUK

Your credit rating shouldn't be affected too much if you have just one credit check. You can usually have about 3 in a 6 month period but this is usually if your credit rating is okay to begin with.

The best thing to do is to pay the minimum to all debts and throw anything left at the debt with the highest APR. This should allow you to reduce the amount of interest you are paying and get the debt down quicker.

I was going to suggest requesting a 0% card but if yoou think your credit rating will be poor then it might not be worth doing this just yet. There are a few good deals out there, but you need to make sure you are keeping within budget which is wht the SOA calculator is such a handy tool.

Consolidating debt with more debt is rarely a good idea as it generally costs more in the longrun.

monstersgang

Thanks a million GeorgeUK ur advice is much appreciated. I understand taking debt and making new debt is a silly idea BUT my problem is the amount of interest im paying on the loans means im getting no where!!!!:mad: and I reckon a new loan will allow me to at least be paying back the laon and not just interest - as im doing. I was worried applying would cause a credit problem so thanks for the info on that.
I will pay some more off everything this payday however my car due mot on 02/02/10!!! I think ill then do another check on my credit rating and maybe apply for a loan - THANKU

MrsTinks

Please don't apply for yet another loan... post up your SOA as adviced already before you do anything

christine_chris_chrissy

just wanted to say that I signed up to a debt managing company I paid £130 per month (that was the minimum they would accept)& they took £25 approx a small price to pay if its your mental health at stake the only reason I am not still with them is because I couldn't find the £130 each month
I know that is another 25 towards debts but I was being really hounded & was very scared & desperate at the time. I would reccomend that particular company.

monstersgang

Hi Everyone , please see my statement of affairs - all advice welcome

Credit cards - (1) £5500 (2) £2400 (3) £1700 (4) £370
Loans (1) £8000 (2) £3600 (3) £1700

My biggest issue is the credit cards as the interest is crazy. Really feel like I need a break!

Kool_Kool

MrsTine wrote: »

Please don't apply for yet another loan... post up your SOA as adviced already before you do anything

I agree try to see where you can save first and use that money to pay more towards your debts, remember that more loans means more interest you pay. I thought I was a good saver before I found this site but I was shocked at how much money I was wasting actually.