Poor Credit Rating - my options?!

Tixy

The reason potential lenders don't like you having too much available credit is that they assess your affordability for the new credit as though all the other credit was maxed, could you still afford the repayments on the new loan.

So in your instance, they would compare your salary to your debt repayments on your existing mortgage and loans plus the cards if you maxed them out plus the new loan that you are asking for.

They consider if they loan £10k to you today plus you then spent £17k tomorrow on the cards do you have enough available funds to make repayments on £27k.

Considering the amount of people defaulting on loans or missing payments banks are being very cautious at the moment.

Ruudfood

That certainly makes more sense. Looks like I'll have to resort to the family for the loan which I really don't want to do.

bouncydog1

As you are paying to have your car repaired can you keep it another year? We are coming into the spring/summer and prams are made for walking with not being carried around in the car!

Try and hold off borrowing any more and use the money that you would have used to repay your family to pay off some of the debt that your wife has incurred. You could also reduce the limits down on the cards or alternatively call and cancel - you might be able to negotiate a cheap purchase rate and use that to buy the car if you really can't manage.

Ruudfood

I don't know how long the car will last. The timing belt needs replacing. They advised me to replace it last summer but it will cost around £700. Plus the MOT is due in June/July and it needs 2 new tyres so I could well be forking out another £500 in a couple of months to keep it roadworthy.

If the timing belt goes, the cost of repair will be more than the car's worth so I'll probably have to wait for that to happen and claim on the insurance.

We've already been tackling the debt and have paid off more than half of it in the last 6 months and closed some accounts so we are dealing with it but it's going to be a lot tougher to continue doing that on just 1 income.

I know if I borrowed money from my family they wouldn't put any pressure on me to pay it back in the short term but I'd feel bad about it anyway.