Need advice on where to raise credit

nine8nine

Hi all,

I have a poor credit rating but have finally managed to get myself off payday loans and high interest credit cards. My only problem is that in doing so I have left myself rather broke and in about a month will find myself late on the mortgage and bills

So despite my poor rating (the mortgage adviser said I have a "behaviour score" of 0.25 and I need 0.45 to get a personal loan or credit card) - I have to raise some kind of cheap finance as a buffer - ideally spread over a longer term.

I have one asset (my house) but its BTL and I have been told by my bank that they can't give me an advance on a BTL property, even if I said it was for home improvements.

Any advice? Many thanks.

EDIT: would a secured loan against the property be feasible?

[Deleted User]

With a poor credit history and payday loans, there are no cheap finance options.

You need to cut costs instead.

gb12345

nine8nine wrote: »

the mortgage adviser said I have a "behaviour score" of 0.25 and I need 0.45 to get a personal loan or credit card

I'd look for a new mortgage adviser if I was you - the current one sounds like they are talking crap.

There is no global score that governs whether you can get a loan or a credit card - it depends on the criteria of the individual lender.

But I'd agree with zx81 - there's no cheap option and if you get desparate you'll end up getting scammed.

nine8nine

Thanks,

I was curious about adding on money to my mortgage, I've paid off around £10,000 of the principle (not including interest) and wanted to see if I could set the clock back and make up for it by overpaying next year.

I think I'm stuck with 10 months of the promo interest rate left before I can look at remortgaging options.

Obviously at the moment I feel good on one hand I finally escaped a vicious cycle, and bad on the other because I was so focused on getting out of it I didn't put anything aside for the period immediately after it.

Cutting costs is good long term but I'm having a short-term issue now that I don't want to solve with going back to the same lenders.

DCFC79

What is the short term issue ?

Got anything to sell
Any family who could help out short term ?

nine8nine

It's a few bills and my next mortgage payment really, I had cycled through a few surpluses in that least 4 months and worked extra shifts in order to finally pay off the last credit card..

So a total of about £1500. I know it doesn't sound like much in the grand scheme of things, but considering my credit cards are at 29% APR and before that the payday loans were at a million per cent I don't want to go down that road again.

Would love to own so much I could quickly raise a grand or two from selling it, unfortunately no such luck.

Family have already helped me come out of the short term million percent debt so I don't want to lean on them again if I can possibly help it.

My idea was really to claw back a bit of the mortgage and then overpay starting jan when I've had a bit of a breather. Other ideas were a mortgage holiday starting ASAP or a further advance, and I was shot down on that last one.

Tixy

How much are you short of being able to pay only essential bills this month?
Have you still kept the high interest credit card(s) open?

Edit - cross post - you are short of £1500? why did you rush to pay off the existing debt if you were going to leave yourself so short for the next month?

And you say you want to spread it over a longer term? have you done a detailed monthly budget at any point?

dancingfairy

How much can you realistically afford to repay per month?
1500 borrowed at 29% and repayed over 3/4 months wouldn't be tooo bad if it is essential.
It does however strike me that you haven't really sorted out your budget properly yet if you've paid off your debts but left yourself short for that vital payment of keeping a roof over your head.
Hope you can get back on the straight and narrow.
df

heartbreak_star

Hop onto the DFW board and see if they can help.

HBS x

nine8nine

Hi guys,

thanks for the advice. Seems like there isn't much middle ground once you have paid off your high interest debts and before you're back on the straight and narrow financially.

Yeah I didn't budget very well, but if I hadn't taken a shot at clearing everything I would have been still worrying about those debts. As it was the last 3 months became a kind of zero sum game, I knew I would fall short somehow but my number one priority was never to fall into the trap again. As I said the credit accounts are still open and probably happy to snatch me up again but I don't want another go on that particular financial merry-go-round.

Maybe I should X post this over to mortgage advice? I would sincerely like to know if there is any way I can make that investment work for me in the short term, and make up for it later, as this seems like the best "loan" I will get.

As a last resort there is also taking a loan from family/friends - but like I've got to keep what goodwill I have with them now I'm free of silly APR debt.

Tixy

Refinancing your property either by borrowing more on your BTL mortgage or by taking a secured loan will take some time to set up (thats if you can do it at all). They will likely need to do a valulation before they would consider it. And there will likely be valuation fees and set up fees intitally.

Its unlikely to work out cheaper than using your high rate credit card.

Its also unlikely to be viable to do this before your next mortgage payment falls due, and if you miss that then that further damages your file and make it less likely that you would be able to secure further debt against your property.

Is your property not let out at the moment? if it is does the rent not cover the mortgage?