Struggling with debt? Ask a debt advisor a question

MarieC5575

Hi James

Thanks for getting back to me. I have already used the debt remedy tool whic recommended a DAS but I can't commit to it yet as I am petrified that due to the DAS and poor credit history the Halifax could refuse to renew my mortgage and as I said we don't have many options for a mortgage due to the type of house. I'd love to get this sorted but don't want to draw attention to our financial predicament in case this affects the renewal. Also what happens to items which are on HP i.e. our car, worth about £2500 and currently approximately the same outstanding and our couch approximately £350 outstanding?

Thanks
Marie

pinkl0ve27

I recently posted a thread on here regarding the problem I am this year because I have resorted to pay day loans over Christmas.

I have got myself into quite a bit of financial difficulty and its proving hard to keep on top of everything. I will admit I have myself to blame because what I did was a quick and easy route but because I rely on it every time things get difficult I go back to source so it feels like a vicious never ending circle. I had a chance to resolve it when I got a call from Clark Richards but having read reviews it put me off their debt management plan.
Does anybody have any ideas or helpful advice or links on sorting out my debt problem as I am struggling to make it to pay day and that is where the problem will start again.
Is there anything you can do to help.
I can give you a list of the loans I have taken out and what I am due to owe if it needs be.

ramomalis

Hi James,

Just wanted to thank you for your advice regarding my post.

Soon as I have some privacy and time this week, I'll sit down and make the call to try and sort my [financial] life out. 2013 has to be the year for change! One day at a time...

I hope somebody out there saw my post and related to it and gave them the motivation to sort out their finances too :T

Thanks again!
x

StepChange_James

MarieC5575 wrote: »

Hi James

Thanks for getting back to me. I have already used the debt remedy tool whic recommended a DAS but I can't commit to it yet as I am petrified that due to the DAS and poor credit history the Halifax could refuse to renew my mortgage and as I said we don't have many options for a mortgage due to the type of house. I'd love to get this sorted but don't want to draw attention to our financial predicament in case this affects the renewal. Also what happens to items which are on HP i.e. our car, worth about £2500 and currently approximately the same outstanding and our couch approximately £350 outstanding?

Thanks
Marie

Hi Marie,

There's no reason why talking about the implications of a DAS would have any knock on effect with future mortgage offers, so you're fine to discuss things with your mortgage lender.

If you're concerned you could always call up your mortgage company, not give them your account number and ask a general "how would you deal with this theoretical situation" type of question. Obviously they won't be able to comment on your specific situation but they may be able to say how they usually deal with mortgage deals that run out for people with less than perfect credit files.

I'd suggest giving us a call on the number in your paperwork to discuss your hire purchase arrangements. It'll get your through to one of our Scottish debt law specialists who can take you through everything.

Kind regards

James

Jo1507

Hi, I am after some advise. I have been paying my debts off for the past 6 years and finally am in the home stretch. When I originally took out the loans and credit cards I was able to make the payments but after a couple of years I did have some defaults so my credit score is poor. I currently have a car on finance which I will be able to pay off early once my other debts are cleared but was wondering if it would be beneficial to my credit score to continue making the payments as per the original agreement or to pay it off early?
Thanks, Jo

StepChange_James

pinkl0ve27 wrote: »

I recently posted a thread on here regarding the problem I am this year because I have resorted to pay day loans over Christmas.

I have got myself into quite a bit of financial difficulty and its proving hard to keep on top of everything. I will admit I have myself to blame because what I did was a quick and easy route but because I rely on it every time things get difficult I go back to source so it feels like a vicious never ending circle. I had a chance to resolve it when I got a call from Clark Richards but having read reviews it put me off their debt management plan.
Does anybody have any ideas or helpful advice or links on sorting out my debt problem as I am struggling to make it to pay day and that is where the problem will start again.
Is there anything you can do to help.
I can give you a list of the loans I have taken out and what I am due to owe if it needs be.

Hi there,

We're speaking to many people in a similar situation at the moment. Payday loans can be very tempting but they can often make things worse. I wouldn't blame yourself though, it's better to focus on getting things sorted out. So congratulations on taking steps to get back on top of your finances.

I don't have any experience of Clark Richards but it sounds like they are a offering you a fee based debt management plan (DMP). We provide free DMPs which will do the same thing but don't involve any cost for our clients.

As we are a charity, we only recommend DMPs to people where they are the best solution so the I'd suggest you get in touch with us. We'll then look at your finances, advise you on the options. If it's a DMP we'll be able to set that up for you and if it's something else we'll guide you through that solution instead.

The first thing to do is visit our online debt advice service Debt Remedy (http://www.stepchange.org/msehelp) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

If you phone us it may be possible to refer you directly to a debt advisor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

Hope this helps.

James

p.s. we've a handy blogpost on dealing with payday loans: http://moneyaware.co.uk/2013/01/payday-loan-debt-help-what-to-do-if-you-cant-afford-the-payment/

StepChange_James

ramomalis wrote: »

Hi James,

Just wanted to thank you for your advice regarding my post.

Soon as I have some privacy and time this week, I'll sit down and make the call to try and sort my [financial] life out. 2013 has to be the year for change! One day at a time...

I hope somebody out there saw my post and related to it and gave them the motivation to sort out their finances too :T

Thanks again!
x

Excellent! Good luck with your phone calls, I'm sure you'll feel better once you've given us a call.

It's always great to hear when someone has taken the initiative to get help with their finances. It can be daunting at first but is really good way to improve your quality of life.

I'm sure there will be people who read what you've put and might feel that bit more tempted to get help themselves.

Kind regards

James

StepChange_James

Jo1507 wrote: »

Hi, I am after some advise. I have been paying my debts off for the past 6 years and finally am in the home stretch. When I originally took out the loans and credit cards I was able to make the payments but after a couple of years I did have some defaults so my credit score is poor. I currently have a car on finance which I will be able to pay off early once my other debts are cleared but was wondering if it would be beneficial to my credit score to continue making the payments as per the original agreement or to pay it off early?
Thanks, Jo

Hi Jo,

Thanks for posting.

If I've read your question right, it sounds like you've had some money problems in the past which lead to some negative information going on your credit file but you're doing better now and are making payments again.

If so then your credit history will be getting gradually better as your payment history will show some issues in the past but you are currently making the full payments on the accounts.

Once you've cleared these debts your file will look better because it'll show you don't have these debts to deal with anymore (and therefore are in a better position to deal with any new credit you apply for).

Whether to pay off the car finance by installments or a lump sum is somewhat debatable. Installments will mean you'll accumulate more payment history than paying a lump sum all at once. On the other hand it will show that you've a debt outstanding which some lenders may think reduces your ability to cope with new credit.

It's also worth bearing in mind that you might save some money by clearing the car finance early.

I know it's a cliche, but time is generally the best thing for improving credit histories. The defaults you've had in the past will stay on your file for six years and then drop off. They do matter less the further they go back into your credit history though.

If you think about it from the perspective of someone you're applying to for credit. Someone who had debt problems 4 years ago is less of a risk than someone who has a default notice just the other week.

It's tricky to give straight answers on issues about credit ratings as each lender makes decisions based on their own criteria and they can be a bit secretive about how these decisions are made. I hope this has been useful though.

Kind regards

James

Jo1507

StepChange_James wrote: »

Hi Jo,

Thanks for posting.

If I've read your question right, it sounds like you've had some money problems in the past which lead to some negative information going on your credit file but you're doing better now and are making payments again.

If so then your credit history will be getting gradually better as your payment history will show some issues in the past but you are currently making the full payments on the accounts.

Once you've cleared these debts your file will look better because it'll show you don't have these debts to deal with anymore (and therefore are in a better position to deal with any new credit you apply for).

Whether to pay off the car finance by installments or a lump sum is somewhat debatable. Installments will mean you'll accumulate more payment history than paying a lump sum all at once. On the other hand it will show that you've a debt outstanding which some lenders may think reduces your ability to cope with new credit.

It's also worth bearing in mind that you might save some money by clearing the car finance early.

I know it's a cliche, but time is generally the best thing for improving credit histories. The defaults you've had in the past will stay on your file for six years and then drop off. They do matter less the further they go back into your credit history though.

If you think about it from the perspective of someone you're applying to for credit. Someone who had debt problems 4 years ago is less of a risk than someone who has a default notice just the other week.

It's tricky to give straight answers on issues about credit ratings as each lender makes decisions based on their own criteria and they can be a bit secretive about how these decisions are made. I hope this has been useful though.

Kind regards

James

Hi James, Thanks for your response it is much appreciated. I do also have current credit cards that don't have any defaults against them and I am paying them off in full every month so think I will pay my car off (It does save me some of the interest) and the use the payments I'm making on the credit cards to rebuild my credit score. Is there anything else you can suggest that would help?

Thanks, Jo

StepChange_James

Jo1507 wrote: »

Hi James, Thanks for your response it is much appreciated. I do also have current credit cards that don't have any defaults against them and I am paying them off in full every month so think I will pay my car off (It does save me some of the interest) and the use the payments I'm making on the credit cards to rebuild my credit score. Is there anything else you can suggest that would help?

Thanks, Jo

Hi Jo,

The article on the main MSE site is really good. This link takes you straight to it: http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve. The electoral roll tip is particularly important I'd say.

There are lots of people who claim to be able to do all sorts to improve your credit score. They tend to either be a bit dodgy or will just do the stuff you can do yourself by following the advice in the article above.

Good luck

James