Debt Relief & Credit Rating

kirstyw1988

I have been in touch with the National Debt Relief who have proposed a monthly plan for me which means I will be debt free in 4.5 years. I am very happy with the re-payments and the amount of time it will take, but the only thing worrying me before I accept is how it will affect my credit rating.

Does anybody have any experience of this and know the extent of the credit rating damage? We would probably want to build an extension on our house in about 2-3 years and would need to borrow more money on our mortgage for that, but my concern is that I won't be able to if my credit has been affected?

Ideally I would have just wanted to get a secure loan and pay the credit cards off, but my applications have been declined because of the amount I need to borrow in order to do that.

Thanks in advance.

[Deleted User]

You don't have a credit rating - just credit files that lenders view and make decisions on.

What is the current state of you file? What do you owe, have you defaulted, any missed payments and so on?

Essentially, any defaults, arrangements to pay, DMPs etc will be viewed negatively by any mainstream lender.

kirstyw1988

Thanks. My current rating on clearscore is like 350 which is about average. The debts I have are 2 credit cards and a Very account. I don't miss payments but am just struggling with the cost as the interest is going up and I only pay the minimum each month so feel like I'm never getting anywhere!

[Deleted User]

kirstyw1988 wrote: »

. My current rating on clearscore is like 350 which is about average.

As I mentioned, you don't have a rating. Clearscore don't lend money or make decisions for lenders.

If you are maintaining payments, I'd strongly encourage you to keep doing so.

Visit the DFW boards for advice on how to cut costs and throw more at your debts. Make sure you target the highest rate debt.

kirstyw1988

Although I am manging payments, it is really killing me to do so and means I have been in my overdraft the past few months, plus if I carry on as I am just making the minimum payments it is never going to clear as interest just gets added and so you end up not really having paid any offf (if that makes sense!).

Thanks.

[Deleted User]

If you do choose to default on them, forget about any further borrowing for a few years.

kirstyw1988

Thanks. That's basically what I am trying to find out - whether it will be impossible to get the extra money to extend our house etc and for how long it wouold be impossible for.

[Deleted User]

There's no single answer. Each lender will view you differently - but it will be on a sliding scale from 'no lending', to 'maybe but at a high rate', to 'may lend at a decent rate'.

If you're going to go to a full blown DMP, I'd suggest you won't get anything decent until it's fallen off your files in 6 years.

kirstyw1988

Thanks. Definately helping me to make my decision!

sourcrates

kirstyw1988 wrote: »

I have been in touch with the National Debt Relief who have proposed a monthly plan for me which means I will be debt free in 4.5 years. I am very happy with the re-payments and the amount of time it will take,

Hi,

Just one moment here.......

Who are National Debt Relief ?

Are they charging you a fee for this service ?

If so STOP !!!

There are free to use debt charities such as Stepchange, who will arrange a DMP for free with no fee`s whatsoever :

https://www.stepchange.org/Howwecanhelpyou/dmpdebtmanagementplan.aspx?WT.srch=1&WT.mc_id=270049&WT.seg_1=stepchange&gclid=CLK1z7mxp9YCFae37Qodt6QIKA

Edit :

They are a debt mangement company :

"Debt Management Plan Fees

We do not charge a set up fee for your debt management plan, which means your payments will start going towards to your debts/creditors straight away.
For managing your plan we will deduct a monthly management fee from your payment. Our monthly management fee is charged at £25 per month plus £2 per creditor (but not exceeding £60 per month)."


DONT DO IT PLEASE !!!!!!

This money could be going to your creditors instead !!!

fatbelly

I assumed it was National Debtline but you are right - there is a northern Ireland based company of that name, who charge £25 plus £2 per creditor per month, to a maximum of £50.

What a waste of money.