Improving credit rating

MartieF

Hi, I currently owe approx £15000 to the bank and £275 to Link having had a debt sold to them. These debts were loans that were being paid for and then my business (and marriage) went bust and I have been in financial difficulty ever since.I am currently paying £10 per month off the smaller debt but nothing off the large one as the bank as we both agree I am in no position to pay anything off at the moment. Unfortunately, my car and laptop won't last forever (are already quite old) and I really need them for work. What worries me is when the time comes to replace them I will have no money and no credit rating which could mean I won't be able to work and the consequences could be dire for me.

How can I improve my credit rating so that, say, in a couple of years I might be able to buy a car and a computer to enable me to keep working?

Any help appreciated, thanks.

[Deleted User]

Normally, I'd suggest getting a credit card and using it regularly and paying off in full each month.

But the defaulted loans sitting on your file will almost certainly negate any benefits that would bring.

DCFC79

Im sorry to say but you credit rating isn't what your aiming to improve, its your credit history.

You will be able to work but will have to find alternative work.

oliviamoore81

i'm sure there are companies out there that work with loan companies where they pay off your debt (or a percentage of it) if you keep up with the credit card payments that they give you. if you did a bit of research on this (clearly i'm no expert!) them i'm sure you'd find something. you may not be in a position to get a new car/laptop immediately but having a credit card and making regular payments means your credit rating will slowly improve

Ebe_Scrooge

oliviamoore81 wrote: »

i'm sure there are companies out there that work with loan companies where they pay off your debt (or a percentage of it) if you keep up with the credit card payments that they give you.

I've never heard of this, but it sounds incredibly dodgy, to put it mildly. If such companies did exist, I'd be advising people to not touch them with a barge pole. "I'll pay off your debts for you, all you need to do is take out a credit card with me at 20,000% APR, and if you default I'll send the boys round to kneecap you".

To the OP, as ZX81 says, the fact that you have defaults, added to the fact that you seem to be on a "reduced repayment" plan, means your chances of rebuilding your credit history at present are pretty slim. Your best bet is to save some money each month to put towards a new car + laptop ( second hand reconditioned ), or else towards repairs ( probably the better option ). Certainly as far as the car goes, it's almost always better to repair what you've got rather than buying a new one, when times are tight. Cars have to be in a really dire state before buying a new one is financially more viable than keeping the current one going.

If you "can't afford" to save some money each month towards this - then how on earth are you expecting to afford loan repayments on replacements ? Sorry, that's not meant to sound harsh or judgemental, just realistic. Effectively what you're doing is putting aside now what you would be paying on loan repayments in the future, and saving yourself a whole shed-load of interest in the process.

Thrugelmir

MartieF wrote: »

I am currently paying £10 per month off the smaller debt but nothing off the large one as the bank as we both agree I am in no position to pay anything off at the moment.

These are the issues that need addressing. If all you can afford is £10. Then you are going to have rethink your plans. As difficult as this maybe.

MartieF

Thanks everybody. At first glance I reckon I'd best start saving up for a new car rather than getting in more debt. I do need to find more work but also desperately trying to maintain life/work balance (health!) which is tough.

Just an afterthought....If nobody has ever used some budgeting software called You Need a Budget, YNAB for short (ok I know it's a bit cheesy sounding!) I just think it's worth mentioning that I started using it about a year ago and were it not for that I would have gone under months ago- it's been a genuine life saver for me and I just need to start using it to put as much as I can aside every week now.

Many thanks again :-)