Poor Credit Score - Need a Loan- Help

0Credit

Hi MSE community!

So I basically need a loan to clear old existing bad debts but the problem is I have a 403 credit score due to a credit card I defaulted approx 2 years ago.

My debts are well managed (I pay them) currently due to me receiving a nice consistent income which had been happening for 14months + now and is at a very low risk of stopping in the next 5 years.

Although they are well managed the interest is still very high, the cost of paying them each month is high and basically I don't want to ever lose track.

My debts:

£2400 - Vanquis credit card. Payment £150 per month
£865 - Virgin credit card: Payment of £25 per month (this is the defaulted card and there is 0 interest)
£1350 - Store card: £84 a month payment
£4400 overdraft - Halifax bank sent to debt recovery - Payment of £70 per month with no interest.
£480 - NPower £50 per month - no interest
Northumbria water - £228 - £38 per month no interest
£280 - Credit Card minimum payment £5
£190 - Credit Card minimum payment £4

I also have personal debt with no interest for just under £10000. I payout approx £100 per month for these.

As you can see from the debts the interest rates are the highest in the business. This is due to them being available for bad credit score applicants so they rinse us as hard as possible.

I have applied to over 20 different loan providers and been rejected everytime. I have also used the Experian service where they match your credit with loaners however all the one with reasonable interest rates have denied me.

I am working as hard as possible to up my credit score and have taken it from a mid 200's to the 400+ it is now in just over a year. The problem is if another year goes by and I have paid £2500+ more interest than I could have it will just keep holding me back from being able to say buy a home or even just be a bit less stress fee. Ideally I would get a £5000 loan to clear the high interest debts and do so in under a year.

Oh my income:

£2000 per month pre tax.

Expenses:

Debt £550
Diesel: £220
Rent: £200-500 (currently sofa hopping)
Food/Drink: £200
Phone: £55
Family: £100 (niece and mum)
Fun: £100
Clothes: £100
Hobbies: 100

As you can see I am overspending as there are a few bits missed from there. I am cutting back as much as possible currently but of course the debt is really hurting my life and something I want to sort fast.

[Deleted User]

You won't find a loan, with that level of debt and a poor credit history.

You need to do three things -

1. Snowball your debt - pay as much as you can to the highest rate debt, minimums to the others (plus £1 in the case of the cards)

2. Cut your costs - go to the DFW boards for help with this. £300 a month on 'fun, clothes and hobbies' is insane in your situation.

3. Ignore your credit score. It's worthless and has no bearing on how lenders see you.

0Credit

Hi thanks for the reply as blunt as it is. The amounts were top end but I see your point and it was not one which I didn't know.....just maybe hiding from it slightly.

Thanks

0Credit

Snowball: Makes a lot of sense however a lot of the companies always try to push for higher amounts to be paid. Also should I ever be a good debt customer? The £4400 overdraft I have to say they have been the nicest people I have ever owed and never came after me hard. Do I reward them for this or is this dumb?

What can I say to other companies pushing for higher amounts?

2. Cutting costs: Noted and checking out the DFW boards which I can already see some great feedback.

3. Credit score: How does it not matter? I thought this was what all debtors look at?

[Deleted User]

You pay whatever is the contracted amount on each, but throw everything else at the highest rate debt. As long as you;re paying at least minimums, you don't need to tell anything to anyone.

No lenders looks at your credit score. It's something only you ever see as it has no meaning to anyone else. In short, it's fictional.

Lenders purely look at the data on your credit files.

foxy-stoat

You were always going to get a decline after the third credit application - and yes, your credit score is worthless.

Best thing is to cut right back on anything other than essential monthly spending, forget hobbies and buying clothes or having fun and use that to clear the highest interest rate debts first.

You have just under 50% debt to gross salary ratio so you will not find a loan until you can at least half that, but you mention you have another £10,000 debts so I would forget about borrowing your way out of debt, just address the causes and you will sort yourself out, it will take a long time.

Good luck.

0Credit

Thanks again.

Ok so my only choice in the world right now is to

1) Stop spending so much on unnecessary purchases

2) Use that money to pay off debt - Starting with the higher interest rates.

?

So for me looking for loans to cover this in that way is a 0% chance of happening? So I just have to stomach pumping my earnings into this bad debt? Is there any way I cleared say half of it then try for loans again or am i just completely !!!!!!ed?

0Credit

foxy-stoat wrote: »

You were always going to get a decline after the third credit application - and yes, your credit score is worthless.

Best thing is to cut right back on anything other than essential monthly spending, forget hobbies and buying clothes or having fun and use that to clear the highest interest rate debts first.

You have just under 50% debt to gross salary ratio so you will not find a loan until you can at least half that, but you mention you have another £10,000 debts so I would forget about borrowing your way out of debt, just address the causes and you will sort yourself out, it will take a long time.

Good luck.

Hi thanks for your reply also. I left my above reply before I saw yours of which I noticed you answering some what I asked already

This is essentially what I have been doing - just paying off as much as possible and not falling behind.

A quick rundown on when I got these debts

£10k personal - 5 years ago
Majority - 4 years ago
£1300 store card 3 years ago
Vanquis £2500 credit card - 2 years ago
£200 and £300 2 years ago

I was going through a hard time and my head was not screwed on It is 'old' debt and something I am trying not to repeat but in my mind a loan was a smarter way than anything else.

Kbk23

Credit unions do not look at credit scores. They process credit applications manually based on budgeting. So I would pop into local credit union and take a 3 month statement. Also, if I was you I would remove majority of you credit facilities in order to prevent slipping in again. Keep 1 credit card that has lowest interest for emergency uses. Bare in mind the maximum I've seen a credit union give out is £7500 so not sure how much they can offer.

0Credit

What is a credit union?

Also I cannot just get rid of multiple credit cards as they are all maxed out as such

Vikipollard

You can cut them up and close them. That way as and when you pay off some of the debt, you are not tempted or able to reuse the available credit.

And Google is your friend for credit Unions. Be aware there is an expectation that you save a fixed amount every month; it is not simply somewhere to get a loan and they usually expect you to save for a few months with them before they will lend to you.