Hi all! (First Post)

Red_Man_2

Evening all :j

Just looking for a little bit of advice.

Done possibly what a lot of people here done, as soon as they turned 18, took out every credit card offered too them (Free money right???! :mad: )

I'm now 22 and looking to get a mortgage, im worried that my credit history over the last 4 years may not exactly help me! Ive never had any CCJ's or anything like that but i have been placed on a few repayment schemes.

My debt might look fairly small compared to other peoples im seeing, but its not just debt repayment advice i'm looking for. I'm ordering a Credit report this Friday to see where i really stand.

Anyway heres my details.

My incoming at the moment (Im paid weekly so sorry if its a little harder to give advice)

Weekly income:

Wages = £362 (I get quite abit of overtime but im presuming its best not too rely on that and just go off my basic wage?)

Weekly Outgoings:

Rent to mother = £50
Commute to and from work = £10

Monthly Outgoings:

Savings = £150

Bills:

Credit card one (Capital One) Limit=£400 Balance=£650

Credit card two (Capital One) Limit=£200 Balance=£460

Credit Card three (Lloyds TSB) Limit=£1000 Balance=£1000

Catalogue (Next) £85

As you can see i'm hugely over my balance on two of my credit cards and the APR on them is high so im guessing they should be my priority?

I dont want to be totally skint over the next few months while i pay these off, its my girlfriends birthday coming up and of course Valentines day.

Ive got two £200 payments planned to go to the Capital One credit cards in the next 4 weeks then £60 to each after that to get them out of the red.

I like to enjoy my weekend spending around £80

If you need to know anything else then please just ask.

Hopfully someone can help me, i feel i wanted to ask more but can't remember at the moment so i'll get back to you all if i remember.

Oooo i also took someones advice and started writing down what i spend each day and what i spent it on.

Today £1 (chewing gum and crisp for work)

Thats it :rotfl:

pudding06

Hi RM

ok really you need to show that you can handle your financial committments, that measn firstly as you quite rightly identified - getting back within your credit limits!!!!!

so that must be your priority. The banks will want to see you making regular payments and showing you are rtespoinsible with your money - ie making payments on time and NEVER late form now on.

If you havent already make sure you always pay in good time. Set up direct debits for the minimum payments is a good way, as it will always get paid so long as you have the money in the bank!! You can then normally make payments on top of that online or via telephone banking.

So remember regular on time payments,

get within you credit limits asap and stay there!!!

Dont worry about paying the balances remaining off immediately.

your aim is to pay it off over a period of time so it looks good on your profile/credit reort.

check out the rates of interest on each of your cards and pay off the highest one first with extra payments and leave the rest til later by just making min payments,


I do hope this makes sense,

good luck, its great that you are thinking about this now,

welcime to the dfw boards

others 'll be along soon

pudds

KatrinaC_2

Red_Man wrote:

My incoming at the moment (Im paid weekly so sorry if its a little harder to give advice)

Weekly income:

Wages = £362 (I get quite abit of overtime but im presuming its best not too rely on that and just go off my basic wage?)

Weekly Outgoings:

Rent to mother = £50
Commute to and from work = £10

Monthly Outgoings:

Savings = £150

Bills:

Credit card one (Capital One) Limit=£400 Balance=£650

Credit card two (Capital One) Limit=£200 Balance=£460

Credit Card three (Lloyds TSB) Limit=£1000 Balance=£1000

Catalogue (Next) £85

As you can see i'm hugely over my balance on two of my credit cards and the APR on them is high so im guessing they should be my priority?

I dont want to be totally skint over the next few months while i pay these off, its my girlfriends birthday coming up and of course Valentines day.

Ive got two £200 payments planned to go to the Capital One credit cards in the next 4 weeks then £60 to each after that to get them out of the red.

I like to enjoy my weekend spending around £80

If you need to know anything else then please just ask.

Hopfully someone can help me, i feel i wanted to ask more but can't remember at the moment so i'll get back to you all if i remember.

Oooo i also took someones advice and started writing down what i spend each day and what i spent it on.

Today £1 (chewing gum and crisp for work)

Thats it :rotfl:

Hi RedMan,

You've got an income of £362 per week, which equates to a monthly income of about £1570 per month.

Your monthly outgoings are :
Rent: £216
Travel:£43

So you have £1311 going somewhere every calendar month.

Your total debts are £2195 so if you cut back HARD you could pay them off in three months, even with money to spare.

How much do you have in savings? Normally it's better to use at least part of your savings to clear any debts as you are probably paying far more in interest than you are earning.

Can you post the APRs and minimum payments for your debts?

Kat

pudding06

just had a thought re direct debits on the over balance credit cards = you may want to wait until these are back within their limits just in case they can take the over balance amounts as well as you min payments.

good luck

pudds

ftbworried

Is the figure for your wages gross or net?
Are you looking to get a mortgage on your own or with your gf?

Assuming those figures are for net- I;m guessing your on around £23k a year (gross). Punching your figures into halifax's (for the sake of argument) mortgage calculator then they would lend you between £100-£115k (depending on circumstances). That is assuming that you have NO credit committments - i.e you are debt free.

Red_man wrote:

I dont want to be totally skint over the next few months while i pay these off

...

I like to enjoy my weekend spending around £80

The thing about this is that if you wanting a mortgage (and thus a house!), this is what life i going to be ike I'm afriad.
On the figures above your mortgage repayments may well be above £700 per month (based on 6% interest- I'm guessing you have no house deposit?).

So, you could be debt free within 3 months if you paid that amount to your credit cards.

Realistically if you are spending half of your income on mortgage, then ontop paying £300-400 in household bills then you'll have to stop your £80 weekends anyway. So why not practice what it would be like to have your own house and pay off what you would spend on mortgage/bills off your credit card each month? then you'd be debt free quicker, and you could maybe get some savings together for your legal fees and deposit.

If you can't cope with 'being skint' now then good luck when you get your own home!!!

If I was you I'd get my head down and clear those debts as quick as possible before you start to think about a mortgage.

CLAPTON

there is no point having savings if you have debts at high APRs.
use any savings and any share cash to snowball your debts i.e.

pay the minimum on each debt except the one with the highest APR..on that one pay as much as possible until you clear it. then start working on the next highest APR debts and so on.

except, if you are being charges fees on the CCs when over the credit limit then get these back under the limits asap.

stop spending on credit cards

if you are serious about wanting to save for a mortgage then you need to work out a proper budget.
that is one that includes all your spending..clothes, presents, xmas, holidays, hobbies/interest, work lunches/coffees or what ever you spend. for annual/oneoffs, irregular costs try to work out everything you will spend oveer the next 12 months and divide by 12...then save that amount in a saving a/c so you have the money available when the costs occur.

moxie_2

I agree with Clapton. Try using Martin's budgetting tool, it's on the left hand side of this page under Money Saving Tools. It's really good and helps focus the mind.

Red_Man_2

Wow alot of quick replies. Ill answer your questions and then ask a few more thati forgot, but firstly thankyou all for your help thus far.

1) My savings are in a joint account and this is for our 10% deposit on our house, we've both been strict in the past NOT to touch this because we have the belief that if we dip into it for even the most urgent of cases then after that we may use the money for less urgent matters. So to me, the savings is a strictly no go, we put £300 a month in (£150 each)

Capital One APR is 29.9% on both cards
Lloyds i THINK is 19.9%
And im pretty sure Next is also 29.9%

So all really high rates.

I'm saving for a house with my Girlfriend

Oh and my £362 per weeek is NET.

Ermm a few more questions from me now

In theory, would i be better from a credit rating point of view keeping all 3 credit cards, oweing nothing/very little on them and paying the money off each month through direct debit rather than just going to one card and paying that off monthly?

Re: Ftbworried, when we eventually get our house we're planning for my wages to pay all the monthly outgoings inc food and to have my girlfriends (similar wage) for things like saving, living life, etc. So hopfully we can still have our weekends together.

CLAPTON

it is of course your choice but

saving 150 per month at say 4% (net ) will mean you earn £36 in interest in ayear

however not paying 150 on a debt at 29.9% will cost you £269 per year

Red_Man_2

I do totally understand what your all saying about our savings, but it is more of a principle thing and i dont plan to be in the red on the cards much longer.

bananakinz

Does your girlfriend have any debts?

I personally would forgo the £150 into savings until you have got the cards back into their credit limit they will be charging you for this 'honour' and they ask you to pay up the debt - this will do more damage to your credit rating.

Are you still spending on the cards?