My loan journey

Jonbo55

SO, after reading MANY threads on here about different companies and different experiences with getting or trying to get a loan, i wanted to share my experience.

I'm 26, I live with my partner and our 4 month old baby boy. My credit history is some what sub par due to years of "oh well" thinking. Not so long ago my Experian credit score was 200 (Pretty bad), i have 3 defaults ranging from 4-6 years old - All amounts settled. I have some "credit building" cards a HP agreement for a car and some things on a Very account. My partner is on Maternity so its just my wage paying for everything, we have some savings that is keeping us afloat.

We recently moved and i got myself into a bit of a mare with my credit cards - as a result, i took out an astronomically high interest loan from Avant Credit (bad idea do not use them) for £3000, which i used to clear my Credit card and pay off some outstanding finance i had. The payments were not great but better than paying the high interest credit cards. Until some "unexpected bills" came along and my cards once again took a beating.:mad::mad::mad::mad::mad:

At this point i had £2000 on credit cards, £3000 with Avant (while this may not seem like a lot, when the APR rates are in the high 30%s, the payments are not friendly) so i was once again, back to square one. So, I checked my Experian for the 1st time in about 9/10 months and it had shot up to 623(Still showing as poor) Now i know this score isn't great but to get from 200 - 623, for me was a great achievement!

when i did the credit matcher barely anything came up, so i thought it was a lost cause. I applied a few places anyway thinking that if someone reviewed my credit and saw that i have been a good payer on all my credit account for the last 4 years ish, they may agree the loan, but declined from LLoyds (My bank) HSBC, M&S and Zoopla. I was just about ready to give up and face the fact i was going to struggle for a while when i made one last ditched attempted with Tesco.

So i applied online for £5000, just the amount i needed to clear what i had outstanding. The site crashed as i was applying and got stuck on the "application in progress please wait"....i wanted for about 15 mins. So i called up and a girl told me the loan has been passed to the underwriters who would contact me in 3-5 days.

3 days later i got the documents through with a request for proof of address - i expected that as we had only been in our new house for around 2 months. the APR offered online was 4% but the letter said 9% - totally fine with that as most others had quoted me between 14%-29%. At this point i went online to find out about other peoples experiences and saw people saying "Experience rating of 900 - still declined from Tesco" "Agreement in principle with Tesco - still declined" I immediately gave up all hope.

Few days later i got a call from a cherpy Scottish girl, saying they needed one more proof of address as the one i sent didn't have my full name, i queried with her if everything else was ready to go - she smartly, didn't let me have much info with what was going on. I checked my Experian - no searches from Tesco - i was POSITIVE it was going to be another decline.

about a week passed, then on a Saturday morning, i got a text - "Great news, your loan has been approved - the funds have been transferred to your account" LIFE CHANGING, straight on my online banking, sure enough there it was. I was able to get of the hideous Avant loan (it took 17 mins for them to "process my settlement payment") clear my credit cards (2 of which are now closed) i have gone from paying;
Loan/left over finance - £220pm
Credit cards - £190pm
to payment £98 a month. with no other outstanding debts(other than my car). :j:j:j:j

So my point, when looking for a loan, try not to concern yourself too much with credit scoring as i am proof that a merky passed doesn't always hold you back. One thing i will say is that my score has taken a bit of a beating with the applications but i can take that as im not going to be looking for any lending again for a long time.

[Deleted User]

Bottom line is ALWAYS ignore your credit score, and solely focus on what is on your files.

andyfromotley

Thats good news Jon. Dont ramp up the credit again!! (an emergency fund of about a grand will help enormously with this!)

Archergirl

Well done, keep up the good work, things will get better if/when your partner can contribute again.

mourning

The feeling of consolidating everything to much lower interest and in to one payment is a great feeling.

On the way to getting things on track. Good work!

ViolaLass

The Avant interest rate was 'in the 30s'. Was your credit card debt really on a higher rate than that?

Dobbibill

Well done for getting your debts onto a lower APR.

I hope your experience has shown you can how difficult debt consolidation is to maintain long term. Make sure you address an emergency fund for those unexpected bills because it's going to be a case of 'when' not 'if' they happen again.

Jonbo55

ViolaLass wrote: »

The Avant interest rate was 'in the 30s'. Was your credit card debt really on a higher rate than that?

The Aqua card i had was 39.9%!!! Thankfully that has been closed down now so i wont be getting into that situation again.

now that i have everything in line i will be able to concentrate on building an emergency fun so that when things happen i would end up having to rely on borrowing.

:j:j

Archergirl

Wow, that's a LOT of interest. Pretend you're still on it and try to pay off extra if you can, or put it aside for an emergency.....

Dobbibill

Jonbo55 wrote: »

now that i have everything in line i will be able to concentrate on building an emergency fun so that when things happen i would end up having to rely on borrowing.

:j:j

There's a really motivating thread here if you want some support and encouragement to get the EF going.
https://forums.moneysavingexpert.com/discussion/5076051