Trappings of a Financial Nightmare

tennertim

Hi Guys

Have just joined this forum to ask if anyone might have some advice to help me out of a financial nightmare please.

I've just discovered that since last November, I have paid precisely £12 off the outstanding balance of a credit card due to the extortionate interest rates being charged. I therefore applied for a new credit card with a low interest rate for the life of the balance transfer and was refused. I also have one year remaining on a loan with a bank so contacted them to asked if it was possible to extend the loan and use the money to pay off this credit card. After going through all the questions, they came up with a reasonable package which would mean me paying exactly the same monthly amount as I am now on the existing loan but for another four years. I asked to make the application, only for them to come back and say it had been refused.

I then set about checking my credit rating and found the score to be in the "Fair" range and all entries were in green and "Satisfactory".

I totally appreciate that this mess is down to me but I cannot see a way out of it. The credit card I am trying to pay off has a huge limit, i.e. £10K over and above what I owe and I wondered about asking the company to reduce the limit. However, I don't fully understand how the credit rating works: is it better to show that you have available credit and therefore I should leave the limit alone or, is the limit too high and that is what is affecting my chances of transfering the balance/extending the loan?

Really sorry for the long thread but would very much appreciate any advice you could offer as I feel I am quickly spiraling down into a financial black hole. Thanks very much, Tennertim

fozmcfc

So far you have done the right thing applying for cheaper interest/free interest credit cards, but sadly it would appear that you are unlikely to get accepted. I would also say you shouldn't apply for anymore, as too many searches on your credit file in a short time won't look good.

You could ask for a smaller limit on your card, as this could be affecting your ability to get further credit. Companies will look at your available credit and total debt compared to your salary. The trouble is though as you have already applied for new credit recently, applying for more credit even after a reduction in your limit could still lead to you be turned down.

Because you are seemingly unable to reduce your payments or get another card to transfer to, I would really advise you to try the debt free wanabee boards. Post up a statement of affairs as you can get some advice, tips on how to reduce your current monthly outgoings.

You really need to state your income and complete debt, to get the most useful advice and I'm sure others here and on the debt free wanabee board will give you further advice as well.

tennertim

Appreciate your reply so quickly. Will take a look at the debt free wannabee board and see how I get on there. Thanks so much, cheers Tennertim

crman

I have been advised that the balance on a card should be at 75% of the credit limit to score the highest on a credit check, so it might be worth bring the limit down a bit but not too much.

Thrugelmir

If you've only repaid £12 off the card balance in 6 /7 months then any lender will take the view that you are not in control of your finances. Hence the decline for alternative borrowing.

Yes, the interest rates are extortionate as you say. However, that should be a spur for you to reduce your outgoings where ever possible to reduce the balance owing.

Not suggesting that this is easy and you should approach the task in a measured manner.