Advice please :)

Watalie

Hi everyone -

I'm trying to finally be Debt Free and been working hard on it over the last 2 years or so since my divorce. My current situation is this...

Credit Cards
Cap 1 Limit is £1,200 - pay off every month
Vanquis Limit is £1,250 Balance is £1,000 - Pay min paym't + 50 each month - Have cut it up now so am unlikey to use again.
Barclaycard Limit is £260 - Pay off every month
MBNA Limit is £2400 Balance is £1200ish - Pay min paym't + 50 each month

2 x store cards - Limit £800 Balance - £500 - Again have cut up.
One Catalogue - Limit £2,250 Balance £875 - always pay min paym't + some

I've checked my credit report and have the following -
CCJ - Satisfied and due to drop off my file next year
2 Defaults -Satisfied with one due to fall off next year and one which still has time to run.

Otherwise, everything is shown as "Satisfactory".

I've also had 2 payday loans in the past both of which were paid off on time. Whilst the co's I used "credit-searched" me (and I can see that) nowhere does it show they have been paid off.

I'm trying to save for a house deposit, as well as paying off my debt but am a little worried. Obviously my rating is "very poor" at the moment and I am fully aware that it's my own fault for sticking my head in the sand, but my question is this... at the end of next year, once all but 1 default has finally gone from my account, what kind of rating am I likely to have?

I realise this may be a "how long is a piece of string" question but I would just like for once to see some light at the end of the tunnel

Tixy

Hi

To be honest I wouldn't be saving for a house deposit whilst ever you have debts charging interest. The interest you are paying will far outweight what you can earn in savings. Wait until they are paid off before starting your saving.

What are the APR on your vanquis card, your MBNA card, the store cards and catalogues?
Ideally you should pay the minimum only on all of them and then everything else you can afford to the one with the highest APR, this will make sure you pay the least amount possible in interest.

Have a look at the snowball calculator on www.whatsthecost.com to see how much difference it could make to the total interest you would pay.

Payday loan companies usually do not report to the CRAs (though as you have found they do credit search you first).

Certainly once you have only 1 default left and assuming all payments from now are paid on time your rating should be much better. You may find that once that is over 3-4years old it will have little effect on your ability to get credit.

Numpty_Monkey

I agree with everything Tixy says
use the snowball calc or post the APRs

Watalie

Cheers guys - you are right I should be paying it off rather than saving but I'm saving jointly with my b/f and I'd feel terrible if I couldn't contribute. I think this weekend we'll have to have a serious sit down and "talk" about the money issues.

Tixy

Might be worth you completing a statement of affairs http://www.makesenseofcards.com/soacalc.html before you talk through it all. It'll then be clearer in you head what state your finances are in, and if you use the snowball as well you'll be well armed with everything.

Watalie

Thanks Tixy will do that... should make it clearer for both of us