Will an AP with payday loans affect credit score?

the-baby-beatbox

Hello!

Please be gentle with me as I know that this is such a non-problem compared to many others but I just need some advice.

I'm currently trying to tackle my debt head on and have spoken to Step Change and asked for some advise. They've suggested a DMP and my £7.5k debts will be cleared in 2 years and 10 months, which is great.

I know my debt is small compared to others, but I'm in my late 20s and due to some very unfortunate circumstances I'm due £50k next year. I'd love to be able to put a deposit down on a house but I fear I won't be able to if I get into a DMP now.

What I'd like to do is carry on paying my 2x loans with Natwest as normal, but make arrangements to pay on my payday loans with Wonga, Sunny and Lending Stream. Does anyone know if this will affect my credit score, thus affecting my chances of getting a mortgage?

I'm looking at £1000 with Sunny, £600 with Wonga and £500 with Lending Stream and I just can't face the end of the month knowing it's not dealt with. I've recently been made redundant and I can't afford for it to all come out of my account.

I just feel sad and like there's no one to talk to. I don't want to tell my partner as they have already paid £1000 of my payday loan debts from their interest free credit card and I promised I wouldn't do this again. But I have and now it's even worse

Any help would be gratefully received

BrightLights14

Welcome to the forum! And don't be silly, it's all relative.

Firstly, the bad news is that a DMP of any kind will most likely harm you credit file. In addition, Stepchange would be unlikely to set up a DMP for some of your creditors and not others, as continuing to pay the Natwest loans would be considered 'preferential treatment' of that creditor.

Would you be able to post an SOA (link in the bookmarked thread at the top of the forum, then format for MSE and upload) so that the kind folk here can have a look at your income, outgoings and debts - there may be other options you haven't considered.

Have you been managing to make all the payments thus far?

ndf9876

@the-baby-beatbox

Payday Loans are to mortgage lenders as Kryptonite is to Superman. From personal experience and anecdotal evidence, I believe you may struggle on that score. I don't want or intend to sound mean, merely realistic.

However, if I were you, I would type into your favourite search engine, the words 'debtcamel' and 'payday loan'. I would also have a think about whether or not those payday loans were affordable in the first place. All being well, you should end up finding a website run by a lovely lady who I believe is a CAB advisor.

I'm aware that the above is a bit contentious (at least from some replies I have read) but honestly, I have been down that road and I can say from personal experience that it was well worth it.

[Deleted User]

I think it will, sorry. I'm pretty sure my bank alone sites it as a reason they won't lend end off even after 6 years with my account there I don't fancy moving my bank account. They even get all funny when they have to call out the name.

On the subject of that yellow company, you've got to wonder how the lovely customers who can return their loan after 5 days fairs with their report.

It makes you wonder.

Who knows maybe you will be more heard if you've a problem not yet resolved. Just looking at the Ombudsman decisions makes for interesting reading.

sourcrates

Just the fact you have payday loans on your credit file will result in a refusal of a mortgage, as it suggests to the lender that you cannot budget correctly.

Lenders do not like to see payday lenders on a credit file, the kryptonite quote above is correct.

My advice would be to do what you have to in order to clear your debts and wait until your credit file clears itself before attempting to get a mortgage.

Good advice to go to debt camel, link here :

https://debtcamel.co.uk/payday-loan-refunds/