Can't get anything, may as well just default!

rtho782

JimmyTheWig wrote: »

I doubt that this evidence will be available. Even when recorded as "loans" there is nothing to guarantee that it would help someone's credit file. So I can't imagine them claiming this.


Might help, I guess.

It seems you need to be more imaginative!

http://web.archive.org/web/20100823005515/http://www.paydayuk.co.uk/pages/rebuild-your-credit-with-paydayuk.php

Rafter

rtho,

Couple of things.....

Just not paying your debts for 6 years doesn't mean they get written off. Given your debt to income ratio a lender will want to enforce any debt and could get a court order for 'attachment to earnings' so your debt payment gets deducted from your salary. The only way to get lenders permanently off your back is to declare yourself Bankrupt, but no judge will give you that when you can obviously afford to repay what you owe.

The problem with payday loans is that they imply you can't get cheaper credit elsewhere and can't extend your current authorised overdraft. Which means you are more likely to default on your existing debt.

Your solution is to build up a bit of a buffer to cover unexpected bills and then snowball your debt as you are currently doing. No need for payday loans then. Your debt to income ratio isn't high - you should be able to borrow at lower rates in future (if you have to) - but steer clear of payday loans otherwise you will be denied affordable credit.

Good luck

R.

tonyh66

Im confused with this statement
'Overdraft, used most months, varies when reported from less than £200 outstanding to a max of £2k outstanding, depending on when in the month they feel like reporting. Limit £3k so never exceeding limit.'

are you saying you are going into your overdraft most months? if so where is your spare cash?

dealer_wins

Judging by your attitude the mainstream lenders are right to not lend to you OP!!

rtho782

I use my overdraft as the effective interest rate is lower than that on my loans and credit cards, except the 0% HP, as such I am better off staying in it and clearing other debt, which I am doing.

I could pay the minimum on my other debt and clear the overdraft, but that would effectively cost me more.

My spare cash has been going on overpaying loans etc. If I have £500 of availible funds, a loan is at 24.9%, and the effective APR on my overdraft is 16.9%, then I may as well pay off a chunk of the loan. In fact, as my OD is with Halifax, I pay the same if I am £1 overdrawn or £1999 overdrawn, so I'm better off having £1998 less other debt.

I'm not actually going to default on my debt, as I have said. I've done too much work since I started trying to become creditworthy in 2008 to throw it away now, it is however more than a little disheartening to suddenly discover the goalposts have been moved and that I'm not going to be able to get mainstream credit for another 5 years because I took out a Payday loan and Experian decided to change how they report it.

droiderm

rtho782 wrote: »

I'm not actually going to default on my debt, as I have said. I've done too much work since I started trying to become creditworthy in 2008 to throw it away now, it is however more than a little disheartening to suddenly discover the goalposts have been moved and that I'm not going to be able to get mainstream credit for another 5 years because I took out a Payday loan and Experian decided to change how they report it.

THat's just speculation.

rtho782

droiderm wrote: »

THat's just speculation.

Over on the Consumer Action Group forums there is a post on the CRA board with a link to a recent news story that disagrees with you. I can't access it now from work but will post the link when I get home.

droiderm

I think this might be it

http://www.dailymail.co.uk/money/cardsloans/article-2231040/Payday-borrowers-face-Christmas-credit-shock.html

JimmyTheWig

rtho782 wrote: »

It seems you need to be more imaginative!

http://web.archive.org/web/20100823005515/http://www.paydayuk.co.uk/pages/rebuild-your-credit-with-paydayuk.php

Hmmm. Doesn't say it helps your credit rating, just that it helps rebuild your credit rating. Whatever that actually means.

I would guess that for someone whose credit report was shot to pieces that a PDL repaid on time might actually help, even if reported as a PDL. I'm not saying it would help, but it might.
In which case their claim might be reasonable.
But that doesn't help the OP. The OP's credit record wasn't shot to pieces and didn't need help to be rebuilt. So the PDL isn't even saying themselves that it would be of benefit.

droiderm

Just had a read of the link.

Although most of the major lenders deny they would refuse finance to someone who had a payday loan or had one in the past, unofficially executives admit that repeated use of payday loans makes them wary.

I am not sure that implies that your not going to get prime credit for 5 years!

Lenders are going to take lots of factors when deciding to lend to you. Being constantly in your overdraft, missing some /many payments. It's not a suprise this is one of the factors, you could argue it's maybe one of the most desperate ones. So, you can understand it will have an effect.

Why don't you take this opportunity to clear your debt down, pay your overdraft off and build some good payment history going forward.

Try in 6 months time, then in another 6 months and see how it goes. I will be very suprised if as time goes on, it has a big impact.