Am i missing something here?

Garnet_Gem

It's a blessing in disguise. It's a hard lesson to learn but if you can remain debtfree for 6 years you'll probably be debtfree for the rest of your life. Once you accept that you won't get credit and budget your money, you'll have a sense of freedom. Hard to believe at the moment, but no credit's helping you, not hindering you. Good luck.

jo1972

Garnet_Gem wrote: »

It's a blessing in disguise.

I 100% agree with this, but not too great when you want to get a mortgage after you've sorted all your debts out and the only one you can get, if any, is one with incredibly high interest rates. I wouldn't touch a credit card/HP/Store card etc etc with a barge pole now!! But want my own house!!

Uniscots97

Is this right? I know someone who had an awful lot of debt (and I mean a lot). 6 months after he paid it off he was able to get a mortgage (normal rate) and a low rate car loan. I've never heard of this 6 years rule for someone who doesn't use IVA etc.

SunderlandBlackCat

unixgirluk wrote: »

Is this right? I know someone who had an awful lot of debt (and I mean a lot). 6 months after he paid it off he was able to get a mortgage (normal rate) and a low rate car loan. I've never heard of this 6 years rule for someone who doesn't use IVA etc.

You're right - I know an IFA & he regularly arranges mortgages for people who've had debt problems & he says that even recently discharged bankrupts can get loans & mortgages at decent rates but most people still try & go through their bank or another high street lender who will probably refuse or charge a ridiculous APR.

immoral_angeluk

unixgirluk wrote: »

SO are you barred from getting credit like a car loan for 6 years after paying debt off (non-IVA) or not? I'm confused. It'd be about the only credit I'd be looking to get after paying off my debt (maybe switching my mortgage).

You're not barred at all.. it's just your credit rating will have taken a battering if you had missed payments etc before you paid off the debt.

Uniscots97

I haven't missed any payments, sorry just got very confused about what was actually meant. Can't wait till its all paid off.

Burlesque_Babe

unixgirluk wrote: »

SO are you barred from getting credit like a car loan for 6 years after paying debt off (non-IVA) or not? I'm confused. It'd be about the only credit I'd be looking to get after paying off my debt (maybe switching my mortgage).

It's not a case of being barred for having a loan, it is how the payments of the loan are managed. If it is paid on time every month, then there will be no problems. Once paid in full, it will still stay on the credit report but as satisfied/paid and if paid every month won't have a bearing on future applications. If payments are missed/defualt issued this will have an impact on any credit applied for for the next 6 years.

tigzem

SunderlandBlackCat wrote: »

You're right - I know an IFA & he regularly arranges mortgages for people who've had debt problems & he says that even recently discharged bankrupts can get loans & mortgages at decent rates but most people still try & go through their bank or another high street lender who will probably refuse or charge a ridiculous APR.

Hi - does this IFA charge a fee?

Tigz

chevalier

Hi there
If I can try and clarify. Someone gets into debt, has a problem paying it and defaults, or goes into a debt management plan so they are paying back less than the contractual minimum so they will get defaults.

This trashes their credit rating. However once you are debt free, ie all the debts are marked as satisfied on your credit file, then you can start to build your credit score up again. For example you could get a cash back credit card. High apr? Well yes, but the point is you budget so that is gets paid back in full every month. That way the apr on the credit card is irrelevant. Providing you pay back every month that will have a positive effect on your credit score. Likewise say having sky and never not paying too. It all helps

Some lenders will still not touch you with a barge pole, but some will, it depends on how they credit score you, how much of a risk they think you are. If you can demonstrate (once you are debt free) that you run your accounts properly then this will work in your favour. And as a previous poster noted, quite often an IFA will be able to get a better deal for you, than if you try and do it on your own. Yes IFA's do charge fees, but if they get you say a mortgage at 6% rather than 16% then they will still have saved you money.

hope this helps
chev

SunderlandBlackCat

tigzem wrote: »

Hi - does this IFA charge a fee?

Tigz

I'm pretty sure the current regulations are that all IFA's, Mortgage Advisors, etc have to give you the option to work on either fee based or commission only basis but even if you opt for commission only they have to give you a report on the reasons why they recommended a particular product & what commission they made from selling you the product so that if you later feel you have been mis-sold the loan or mortgage you have everything in black & white to get it investigated.