Advise needed.

NiavePaa

Hi all,

A little bit about me, I have struggled with poor money management for as long as I can remember, I have had many personal problems including gambling/drugs and alcohol problems. I am now thankfully in a far better place, it is still a battle but one I feel I'm winning (over 6 months clean of drink and drugs) the gambling raised it ugly head a few months back but I'm determined that's the last time.

Where I hope you lovely people can help is... I have a poor credit rating due to 2 previous defaults, (now cleared but still present on the report) payday loans and multiple credit checks by lenders and I need some advise.

I stupidly got a new car last year and because of my poor credit score I am paying way over the odds. I love the car but 5 years of high payments are very daunting. What choices do I have?

Also can you give me some advise as to how I can start to improve my rating? Is it worth taking out a credit card to try to prove i am a reliable again?

I appreciate you taking time to read this and look forward to your replies,

Kind regards
P

longtermplanner

is the car on HP or did you get a loan for it?

are all your other debts cleared?

forgotmyname

I thought i replied to this?

I wouldnt apply for a credit card just yet if there is temptation to spend on it and not pay it all off each month.

Concentrate on the car. Can you overpay to reduce costs/interest?

You may find its saves nothing or very little paying it off early. If you cannot then build up a savings account to cover the loan if your ever short for a few months. You need to contact them and see what type of loan you have.

Or check the credit agreement.

I imagine the car was overpriced and the interest will be eye watering. So the car maybe worth less than you owe right upto the last year of ownership. So selling it wont really be an option.

Check the loan type 1st then post back with some figures.

opinions4u

Also can you give me some advise as to how I can start to improve my rating? Is it worth taking out a credit card to try to prove i am a reliable again?

Pay the loan on time. Lenders like that sort of thing.

NiavePaa

Sorry, It's a HP agreement. Car cost £10,303 and by the end of the agreement I will have paid £18,557.50 (5 years @ 28.78% apr).
I also have a credit union account that I pay off monthly (£150) and also another loan £1000 that I took out a few months back at high rate (£150 p/m).

I realise that I suck at this, i appreciate all your comments.

NiavePaa

The payments at present are already causing me issues, so increasing them would be a problem. See me other reply with the details of HP contract.
Thank you for replying.

Heffi1

If you are struggling with your payments at the moment, then taking out a credit card is surely a bad idea, how would you be able to pay it back?

NiavePaa

I have been managing to keep up with all payments but it leaves me with little to live on. I originally just wanted to know if this was a good way to improve my credit rating.

forgotmyname

More credit wont help you if your struggling. Get onto the debt free boards and the old school money saving threads.

Inproving your credit wont help you pay off the car. Improving your score is having some form of finance or loan. Fairly low in relation to your earnings and pay if off on time.

The higher the loan ratio to your earnings the less likely you are to get more credit and decent rates.

Improve your rating by getting rid of the smaller loans and carry on paying the car until finished or VT it when you have paid 50% of the loan value.

50% of the value may not be at the 30 month stage though it could be a bit longer.

I think all you can do it stop spending and get rid of those debts. Applying for more wont help your situation.