Yet another new member looking for help & advice

anagrama

Good evening all.
I've browsed the site in the past but have just signed up as a member and was hoping some of you resident experts could give me a few pointers as to the best way to start digging myself out of debt.

I have almost 15 years of poor spending habits & financial management behind me and, having recently topped out my overdraft yet again, have realised that I need to make some fundamental changes.

Here's the lowdown on what I have to deal with:

£1500 NatWest overdraft, which is costing ~£25 a month in interest.
£500 Cahoot overdraft. Monthly interest is ~£6.
£3675 outstanding balance on a NatWest loan that has 25 (of 60) months left to run. Monthly payments are £147.
£1100 on a Cahoot credit card. I'm currently making monthly payments of £50.

Giving total debt of ~£6800.


After topping out the overdraft again about a month ago, I applied for a £7000 loan from A&L to consolidate, but was turned down.
After a little browsing on here, I got a copy of my Experian credit report (but not yet the score) which shows no serious problems. I also applied for the MNBA Platinum card after reading about the 5.6% money transfer facility, indicating that I would be looking for a £7000 money transfer on the application, so was delighted when I got email confirmation of being accepted, only to receive a phone call a couple of days ago to tell me that they could only offer a £2000 credit limit, which threw my plans into disarray and now sends me back here for advice.

A few questions:

- is spending the £6 to get my Experian credit score a sensible idea?

- would it be wise to take the £2k from MNBA to clear my overdrafts via cc money transfer?

- Is it worth applying for another loan to clear the entire amount given that there have been two other recent searches on my credit report? Or would my chances of getting a half-decent rate be pretty much non-existent?

- what other options should I be looking at?

At the moment I am paying out around £230 month (which is getting on for 25% of my net income) to stand still on the overdrafts and slowly chip away at the loan & cc. Recent lifestyle changes (quitting smoking, cycling to work etc) mean that I am saving up to £150/month compared to before Christmas, but I am still struggling just to scrape by and would love to take a more active approach to reducing my burden.


Thanks for reading, let me know if there's any pertinent information I've missed. All advice gratefully received.

anagrama

OK, just been reading the forum a bit further and think I may be looking at some of this form the wrong angle - I'll read further & complete an SOA in the next couple of days. Still, feel free to offer advice in the meantime!

Little_Vics

An SOA is definitely the first thing to do so we can have a proper look for you!

GeorgeUK

The SOA would definately be helpful.

- is spending the £6 to get my Experian credit score a sensible idea?

No. It doesn't take into account little details like your salary. All companies have a diferent way of calculating the credit score anyway so this is definately not adviced.

- would it be wise to take the £2k from MNBA to clear my overdrafts via cc money transfer?

How much interest are you paying on the credit card each month? More than £6?
You will only be able to transfer about 95% of the card balance so i would definately get rid of the main overdraft. I wouldn't do anything that requires a credit check for at least 3 months, but after that you may want to either get another promotional rate card or possibly an account with a free overdraft. You son't be able to do both as you can only have about 3 credit checks in a 6 month period before your credit score is affected, but too many credit checks close together can also cause a problem.

- Is it worth applying for another loan to clear the entire amount given that there have been two other recent searches on my credit report? Or would my chances of getting a half-decent rate be pretty much non-existent?

Having 3 credit checks in the same month would make you look desperate for credit and would not be a good idea. Later on you may try again but i would suggest a card rather than a loan as it may give you more flexability in paying it off.

- what other options should I be looking at?

Right now getting more credit isn't an option. Have a look at the snowball calculator to see what the most economical way may be to reduce the debt - you may need to try a few different scenarios. I would transfer the money owed to the larger overdraft and whichever of the other 2 debts you are paying the highest amount of interest on.

Any other savings would need to come from either your expenditure or increasing your income.

Oneday77

I would say at the moment don't touch the new CC. After many attempts at consolidation myself unless you correct the underlying spending habits you will just end up with £2000 more of a noose.

If you think you can manage it then yes move you OD but make sure you reduce it to zero straight away and put the rest of your other CC onto it. Then aim to clear it to zero and close it.

But as you've noticed an SoA is needed to advise properly.

anagrama

Many thanks for the comments/advice - and yes, I realised straight after making the initial post that I should have read the stickies and some more of the linked resources site before splurging here - sorry for the noob error! It's amazing how just a couple of hours of browsing has already had me thinking in completely different terms about this, and I'm already feeling a lot more positive. It's also nice to find an online community where I can spend hours knowing that I'm actually doing something worthwile rather than just wasting time! I'm going to read further and then start crunching numbers - will report back in a couple of days. All the best, James.