What will impact my credit rating more?

nmcnau1

Hi

I am after some advice around credit ratings.

I currently have the following debt (all credit cards):

Lloyds: £6355.95 (£1338.28 at 12% interest
£3781.67 at 0% interest until July 2015
£1236 at 0% interest until Jan 2016)
card limit £7000

Natwest: £3938.43 (at 0% interest until Jan 2016)
card limit £4500

Barclaycard: £3170.82 (at 1.5% interest)
card limit £7100

Total: £ 13,571.97 (5174.43 0% until Jan 2016)
(3781.67 0% until July 2015)

i need to tackle this debt. At the moment I am on maternity pay so cannot afford to do more than make minimum payments on the cards to ensure i do not default on any of the accounts but I will be returning to work in July.

My credit rating is currently average (3/5 on Noddle). The main factor affecting that rating is the level of my available credit i am using. I have not had any late or missed payments on any accounts and have not opened any new accounts in the last 2 years.

I am considering two options and am wondering which will impact on my credit rating more; to get another B/T card at 0% and shuffle the debt around (Assuming i am offered further 0% offers on existing cards) or whether to get a loan and accept that i will pay more interest. I hope to have this debt cleared in 6 years.

I am mainly concerned with what will affect my credit rating as the promotional rate on our mortgage ends in June 2016 and we may have to look at switching mortgage companies and remortgaging so my credit rating needs to be in the best possible position for this to happen. The mortgage is joint with my husband who has an excellent credit rating.

Any advice would be appreciated around the best way to move forward and the effect on my credit rating.

Thanks

National_Debtline

Hi

I think it will be difficult for anyone to answer your question of specifically which option will impact your credit rating more as you don’t have one ‘credit score’ as such. When you apply for credit a lender will create their own credit score for you based on their own criteria. The rating you have on Noddle is just a very rough guide.

Having said that, there are general factors which can help to improve your chances of taking our credit, such as reducing your available credit as you say. It’s difficult to quantify the effect taking either a balance transfer or new loan will have on your ability to get a new mortgage though.

If the amount of your available credit is your main issue perhaps you could contact your creditors and ask them to reduce your credit limit.

There is a useful MSE article on boosting your credit score here:

www.moneysavingexpert.com/loans/credit-rating-credit-score?&_ga=1.28900284.1431643695.1421326736#boost

James
@natdebtline

Hazzinho

If you are on less than £27k you will struggle to get more credit, 50% of your annual salary is high risk to lenders. Focus on reducing the debt on the highest interest cards.

Thrugelmir

nmcnau1 wrote: »

I am mainly concerned with what will affect my credit rating as the promotional rate on our mortgage ends in June 2016 and we may have to look at switching mortgage companies and remortgaging so my credit rating needs to be in the best possible position for this to happen. The mortgage is joint with my husband who has an excellent credit rating.

The level of debt you owe. Is going to have a material impact on the options available. If are unable to roll over onto further 0% cards. Then the interest you'll be paying is going to be sizable in the future. You need to sit down with your husband and go through your household budget in detail. In order to find savings to help bring down the debt you owe. The reward being a better mortgage deal. So there's plenty of incentive over the next 12 months to get stuck in.