Debt (with bad credit score) - wanting to reduce debt and increase credit score?

letsstartagain

Hi,


I'm mid-twenties and I've just graduated from uni - now working my first graduate job. I've worked since I was 16 and throughout university but due to some health issues in my previous jobs that left me unable to work for a period of time (sick leave) and the limited finances available to me whilst at university, I ran myself into debt.



At current, I owe £6000 on a barclaycard and £2000 on a student overdraft.



The barclaycard is on a 0% until next September but I am paying around £35 interest a month on with a minimum payment of £135 a month. I'm in a bad cycle of paying the minimum and then spending all of the money bar the interest - so I never actually end up building the credit back up.



My student account is now a graduate one and is 0% fees for the next 2 years.



My graduate job is paying me the highest wage I have had so far in my life, though being a 'starter wage', it's still a fairly average wage however being in the situation I am, it doesn't leave me with huge amounts of spare money each month.



What I wanted to do was get a consolidation loan, pay those 2 off and pay a fixed fee for the next few years with an end goal in site. However, my credit rating is shot and has been stuck on bad for around a year now - either dipping a few points below or above 600 on the experian credit report. Therefore, all places I've applied have said no. Being aware applying and being rejected can have a further negative impact on my score, I'm giving up on this idea.



I've never missed a payment, I'm just finding it difficult to not keep scraping the barrel for money each month. This month was my first full wage from my new job, so things should improve from now on.


I pay rent to still live with my parents and will do for a little while until I'm financially stable. But my credit score is worrying me in that I feel I'll never be able to afford my own home or be rejected for further financing opportunities in the future.



I don't have a goal in mind to pay these debts by (although the student one, by the time the 2 years is up) but I do have big concerns about the barclaycard... given that I don't want to pay £135 and pay £90 in interest when the interest free period ends. So would of course like to reduce this some by next September.



LONG STORY SHORT, WHAT I WANT TO KNOW IS:

- If you were in a similar situation to me - paying above the minimum on your credit card (say +£15 above the minimum on a fixed payment schedule), how soon did your credit score improve?


- Did you bother to save money whilst paying debts back? (or put it all towards your debts?)



- General advice? Tips/tricks



I'm not in dire straits, I just don't have a lot of spare money & end up in difficulty when life throws a curveball as I've no 'rainyday' money put aside (simply cant afford too). I also can't cut back on any of the direct debits I have at current. I just don't want this situation to deteriorate more than it is and try get back to being debt free again.



Thanks to anyone who has taken the time to read this. I just needed to air my worries and ask how other people did it. Suppose this is the harsh reality of credit cards, it's got to be paid back eventually .

middleclassbutpoor

Complete a statement of affairs, reducing your debt will improve your credit worthiness.

A soa will allow people to help you understand your situation to help you understand how you may improve your situation

The simple way to improve your situation is budget properly and ensure that you prioritise your debt repayment over everything else.

CakeCrusader

How are you managing to pay interest on a 0% interest card??


Your credit score means nothing, ignore it. Keep clearing as much as you can on your card (which means don't use it) and try not to worry. I really wouldn't replace a 0% card with a loan, you can guarantee the interest on a loan will not be 0%. Can you post an income/outgoings list so that people can help? Think it's called a SOA.

Willing2Learn

Hello letsstartagain and welcome to the forum.

Another post suggesting you post your SOA (Statement of Affairs). It helps members to give you the best advice and helps you to work out where all of your money is going every month.

http://www.stoozing.com/calculator/soa.php