Very small amount of debt but need advice.

angrykid62

Just had a look at my credit report.

I haven't been able to obtain any form of credit for as long as I can remember,

nor have I tried to, as I know its pointless as I will be declined, end of.

But I thought I should take a look and start the ball rolling on sorting it all out to allow me to obtain a Credit Card or loan should the need arise.

We as a family manage fairly fine without the credit and have everything we need as it is, so wouldn't be tempted to go on a mad spree.

I have a "very poor" rating of 244 , I know that number means nothing to lenders.

anyhow, I owe:

Lloyds Bank: £319 defaulted which was an unplanned overdraft

Provident: £425 - I stupidly took a loan for £500 and didn't keep up with the payments.

Ex-Landlord: £800 CCJ ( current balance of £520 ) paying £40 per month


so all in: £1574 I owe out. which is very small compared to a lot of people I know.

I don't dispute any of the debt as it is 100% correct
But I would like to sort it out.

my incomings are: £550 (£1200 between me and partner) a month

outgoings per month:

CCJ: £40
Credit Builder (MyCashPlus) £6

The following are bills which me and my partner split 50% and listed is
MY HALF

[[**
Sky: £25
Gas: £25
Electric: £35
Water: £10
Tv L: £5
Food: £70
h/hold: £30
insurances: £20
Loan: £50
**]]


so roughly £315 per month leaving approx £200 a month left


If I was to pay the Lloyds & provident off in full over 14 months that
would be roughly £50 a month plus my CCJ of £40

meaning by next march I would owe out £0

does this sound a good plan?

it would bring all of my debts to a close at the same time
(march 2015)
and the CCJ would be paid!

and I would have some green marks from the credit-builder
( I have a 4 month "satisfactory" with them at the moment with no late payments or defaults. )


after March 2015 , would I then start to look at a sub-prime card to further boost my ratings and basically keep a tight grip on the payments until I am in a "good" at least position
and then cancel the card until I am able to start saving for a mortgage etc?

I am 22 at the moment and looking to be in a financially "ready" position to buy at around 27-30

Thrugelmir

The CCJ will blight your credit record in terms of a mortgage for some years.

angrykid62

The mortgage as it stands isn't the "be all,end all"
but is is my main goal.

but if it simply isn't to be by then, well that's how it goes haha.

Tixy

Hi

What are the dates of the defaults on the 2 debts and the CCJ?

Are lloyds and provident chasing you at all at the moment? are you paying anything to them currently?

In terms of credit building, a subprime card is a good idea once you are able to be accepted for one. But ideally you would want to keep the card ongoing, not cancel after a while. The good thing for mortgage lenders (or any lenders) to see is a long term history of managing credit responsibly. If you spend on it each month and have a DD set up to repay it in full each statement then you should keep on top of the debt, not pay interest and maintain a payment history.

Mortgage in 5 to 8years almost certainly not be impacted by any of these current debts(depending on the dates above) and assuming you keep on top of all future credit agreements.

matttye

angrykid62 wrote: »

The mortgage as it stands isn't the "be all,end all"
but is is my main goal.

but if it simply isn't to be by then, well that's how it goes haha.

Thrugelmir, whilst correct, may have missed your goal to be financially ready for a mortgage by the time you're 27-30, as that's easily achievable.

Your plan sounds good.

longtermplanner

It sounds good to me too. Pay off your debts and then seek to rebuild your credit record.

Also perhaps change your name? Obviously British Gas are being a pain. Your current poor credit rating is (sorry!) completely deserved. Now you are only 22 and it sounds as though you now know what you want in life. well done, lots of people don't manage that by 22. You are going to find it easier to get there if you accept that you have to repair your situation, rather than be cross about it. Perhaps I am reading too much into your name! Best of luck!

angrykid62

Tixy wrote: »

Hi

What are the dates of the defaults on the 2 debts and the CCJ?

Are lloyds and provident chasing you at all at the moment? are you paying anything to them currently?

In terms of credit building, a subprime card is a good idea once you are able to be accepted for one. But ideally you would want to keep the card ongoing, not cancel after a while. The good thing for mortgage lenders (or any lenders) to see is a long term history of managing credit responsibly. If you spend on it each month and have a DD set up to repay it in full each statement then you should keep on top of the debt, not pay interest and maintain a payment history.

Mortgage in 5 to 8years almost certainly not be impacted by any of these current debts(depending on the dates above) and assuming you keep on top of all future credit agreements.

The debts are shown as:

LLOYDS BANK:

DEFAULT DATE: 22/06/2012
BALANCE: £318

ACCOUNT TYPE: CURRENT
STARTED: 07/05/2008

CURRENT BALANCE: £319



PROVIDENT 6 PAYMENTS LATE

STARTED: 16/12/2010
CURRENT BALANCE £425
PAYMENT TERMS: £60 X 12 MONTHS

CCJ:

£800
04/08/2013
£40 per month

angrykid62

longtermplanner wrote: »

It sounds good to me too. Pay off your debts and then seek to rebuild your credit record.

Also perhaps change your name? Obviously British Gas are being a pain. Your current poor credit rating is (sorry!) completely deserved. Now you are only 22 and it sounds as though you now know what you want in life. well done, lots of people don't manage that by 22. You are going to find it easier to get there if you accept that you have to repair your situation, rather than be cross about it. Perhaps I am reading too much into your name! Best of luck!

sorry should point out, the BG bill mentioned in other threads is not me or my bill.. its my parents.

I just wrote the thread on their behalf, sorry for the confusion there.

this thread relates to myself.

Tixy

So those accounts/defaults will be long gone by the time you are looking at mortgages (they only stay on file for 6 years from the date of default).

One option is to pay the debts in monthly installments, another option may be to try to save a lump sum and make a full & final settlement offer (a reduced figure to the actual outstanding balance).

Thrugelmir

matttye wrote: »

Thrugelmir, whilst correct, may have missed your goal to be financially ready for a mortgage by the time you're 27-30, as that's easily achievable.

Lenders are now declining even if the CCJ is settled and over the 6 year limit.

Responsible lending policy is going to have an impact in the future.

matttye

Thrugelmir wrote: »

Lenders are now declining even if the CCJ is settled and over the 6 year limit.

Responsible lending policy is going to have an impact in the future.

How would they know?

Unless the application asks if you've EVER had a CCJ, which I've never seen asked. Although admittedly I've never applied for a mortgage.