Credit Score getting worse not better... help!?

MEM62

Rookie1986 wrote: »

I'm in desperate need of a new car as my current one is very unreliable and spends more time in the garage than on the road (it's costing more to keep it going than it's worth). The reason I entered my DMP is because I lost my job so ended up working part time and making minimal payments to my creditors, since then I've gone back into full time employment, cleared all my outstanding debts but now I'm stuck with effectively a 10 year "hangover" or so it would seem to get back on the good side of things

It is often the case that, when things are tight, it doesn't just rain but it pours. I am sure that a car that is costing you in repairs doesn't help your financial recovery either.

In respect of general finances, it is always good to build up an emergency fund so that you have some kind of a buffer for unpredictable or unexpected circumstances. That way when the rainy day comes you have some breathing space and are not immediately up against it with money. Also, when taking out credit or borrowing money during good times it is also always with a thought as to how you would service that debt if you had a downturn in fortune. I believe that this, in particular, is where people get caught out. (In my opinion it's a symptom of credit being too easily available.)

With respect to your car, it is assumed by many posters on these forums that an old / cheap car is unreliable. But that just isn't the case. Many posts have asked for advice on borrowing x-number of £000's because "I have to have a reliable car for work" or to run the kids around or whatever. The fact is we all need our cars to be reliable. They are not cheap to run and an unreliable vehicle is no good to anyone. An older car with a good history can be had for a modest price and give years of good service - so you don't have to spend a fortune on replacing your current one.

I hope you manage to get sorted.

cjmillsnun

Rookie1986 wrote: »

I'm in desperate need of a new car as my current one is very unreliable and spends more time in the garage than on the road (it's costing more to keep it going than it's worth). The reason I entered my DMP is because I lost my job so ended up working part time and making minimal payments to my creditors, since then I've gone back into full time employment, cleared all my outstanding debts but now I'm stuck with effectively a 10 year "hangover" or so it would seem to get back on the good side of things

First off, a reliable car can be found for about £500 to £1000. Yes that's a lot of money, but it is equivalent to 2-3 months worth of payments on an HP plan for a new car. If you can afford to keep your current car going for that long, then you can pay cash for your next car.

Your hangover is 6 years from when you started your DMP (the creditors should've defaulted the accounts at that point), and time is the healer along with responsible use of credit. Give a year or so and try for a credit builder credit card. Use half the credit limit or what you know you can afford to pay in full each month (whichever is lower). As time goes by, say after another 3 years, you may be able to get a better card with a lower rate. Everyone seems to do a soft search eligibility check nowadays so you can check without other lenders seeing you are doing so.

After 6 years your defaults drop off your file leaving just responsible use of credit, and you're good to go again.