Have I screwed up my life for the next 6 years?

HugoSC

When I turned 18 I was stupid enough to start obtaining credit. I started off sensible for the first few months, paying in full and on-time with a Vanquis builder card.

I suffer from mild autism which in my case includes impulsive behavior where certain things I find hard to resist doing. These are trivial but can have a knock-on effect in cases like this.

I kept obtaining short-term loans to fill the gap in my income; two catalogs; four credit cards and now we are here in mid-2019.

I have multiple defaults, almost every credit account has multiple missed payment marks. I made arrangements but couldn't always keep up across the board so some creditors were paid but not others.

Two my credit cards which were from NewDay were passed to collection agencies which I am in an arrangement with now. They won't mark a default for as long as I pay but I already have multiple defaults so this only lights an already lit flame.

The debt totals around £6000 remaining. I predict that I can be debt-free by September 2020. But obviously the 6 year clock doesn't really start until that last debt is repaid and closed which means Sept 2026 would be the earliest my dirty laundry would be washed.

It is my own fault and I don't blame the creditors at all like some people do. I won't repeat this again and want to go back in time to when I had one card that I was paying off every month and would love that to be the case now when I could use it for my work expenses.

I was actually keeping up with my re-payments for as long as I was able to re-finance myself using short-term loans but come November last year is when I started going the downward spiral in terms of the more serious credit file damage aside from all the short-term loans which are damaging in itself.

As my existing credit is maxed out and are not in a position to obtain any more, I now live off what I earn whilst trying to balance paying creditors and rent.

Even if the damage after the fire (when the debts are repaid) is considered extremely severe, is there any chance that I will have an opportunity before the 6 year deletion to obtain credit for responsible use? Do you think creditors will not touch me at all until 2026 or will the longer I am debt-free, the less impact that history has?

I am hoping to maintain a good relationship with my two cards Capital One and Vanquis. Vanquis made a deal with me to pay a set amount each month, get under £500, reduce my credit limit to that amount, wipe 25% of my balance and allow me to keep the card. I am worried because of my credit file's damage that they and Capital One, once their money is paid back will close my account and the only reason they haven't done so already is because I still have a full balance. I am sure Vanquis will keep to their word for as long as I do but Capital One might turn on me after their balance is paid back, as they might say my credit file means they can't justify doing business with me anymore.

I want those two cards to remain active after I become debt-free so that I can responsibly use them and build those OK's back up again, proving I came out of it and are back on track again. All the other creditors will be getting paid off and closed down however.

Advice and past experience would be brilliant, thank you.

[Deleted User]

The 6 year clock will start from the dates the account default.

Is this not a lesson learnt to not obtain any credit again come the 6 years and being "clean" again?

HugoSC

!!! wrote: »

The 6 year clock will start from the dates the account default.

Is this not a lesson learnt to not obtain any credit again come the 6 years and being "clean" again?

If I am lucky enough for Capital One and Vanquis to continue my account with them, I won't need any credit and the only reason I want them is so that I have *something* to work on with demonstrating a better monthly record with. I don't intend to use them for actual borrowing, just taking out what I can put back.

Candyapple

HugoSC wrote: »

I am hoping to maintain a good relationship with my two cards Capital One and Vanquis. Vanquis made a deal with me to pay a set amount each month, get under £500, reduce my credit limit to that amount, wipe 25% of my balance and allow me to keep the card. I am worried because of my credit file's damage that they and Capital One, once their money is paid back will close my account and the only reason they haven't done so already is because I still have a full balance. I am sure Vanquis will keep to their word for as long as I do but Capital One might turn on me after their balance is paid back, as they might say my credit file means they can't justify doing business with me anymore.

I want those two cards to remain active after I become debt-free so that I can responsibly use them and build those OK's back up again, proving I came out of it and are back on track again. All the other creditors will be getting paid off and closed down however.

None of us here know exactly how a lender will choose to conduct their business so your questions regarding whether Capital One will keep your card open after you have cleared your debts is a moot point. If Vanquis have agreed to do this, don’t forget that they too will not be wiping off 25% off your balance out of the goodness of their hearts. More than likely your Vanquis account will be marked as partially settled which is just as damaging as a default.

Your best bet is to continue paying your debts off best you can and in 4 years’ time when the effects of the defaults would have worn off slightly, apply for a new subprime card such as Aqua or Barclaycard Forward or any of the others that are out there.

edrushuk

You have not screwed up your life, you are just going on a little detour. 6 years will go so quickly. If your accounts have defaulted, it will be 6 years from the date of the default. The others will be 6 years from the date of the last payment. Use the time you paying them off learning how to budget and start saving. I was in your position in 2008 owing £13K. Now I nearly debt free ( but this is new credit card which I am reducing monthly), can apply for credit cards with 0 or little interest and buying my first home.. all at the ripe old age of 52.

dealer_wins

You should change your thinking from "I want credit in the future" to thinking about how to never need credit again. Build up an emergency fund as soon as you can, then build up a "luxury" fund, which you can use for holidays, car etc.

Using credit and the interest it involves eats £1000s and £1000s out of many peoples lives over the years which could be spent on much better things!!

HugoSC

dealer_wins wrote: »

You should change your thinking from "I want credit in the future" to thinking about how to never need credit again. Build up an emergency fund as soon as you can, then build up a "luxury" fund, which you can use for holidays, car etc.

Using credit and the interest it involves eats £1000s and £1000s out of many peoples lives over the years which could be spent on much better things!!

It's not a case of wanting credit in that sense. I want to ensure I have a clean, but established credit file for 2026. I can then settle into one mainstream card like American Express, for the rewards and access to finance when needed. Plus, access if ever needed to credit products like car finance, mortgages and low-rate bank loans.

Credit doesn't have to be doom and gloom if used in the right way. I am young, which is an advantage in this case as I won't be older than 25 when this blows over. If I made this mistake at 25 then it'd be more of a problem as these are the "prime" years when it comes to mortgages etc.

System

I done exactly the same as you, 18 years old and was getting accepted for everything... so I applied for everything and was paying my debts back in a timely manor until I lost my job I was in about £5000 debt, I had numerous defaults pretty much every debt I had was with a collection agency.

I got my head screwed on and at 25 I can happily say I’m debt free, my credit score is now on the up I’m scared senseless of getting any sort of credit now and honestly refuse to do so
Get it paid man feels so good when that bubble of debt is gone trust me ha.

[Deleted User]

Ryanh196 wrote: »

I done exactly the same as you, 18 years old and was getting accepted for everything... so I applied for everything and was paying my debts back in a timely manor until I lost my job I was in about £5000 debt, I had numerous defaults pretty much every debt I had was with a collection agency.

I got my head screwed on and at 25 I can happily say I’m debt free, my credit score is now on the up I’m scared senseless of getting any sort of credit now and honestly refuse to do so
Get it paid man feels so good when that bubble of debt is gone trust me ha.

Well done for clearing the debts but seriously ignore your score.

8ofspades

I agree with dealer wins - you really need to focus on clearing your debts and building your savings (you'll need to if you want a deposit for a house anyway) - not focus on getting to a place where you can attain credit again. Yes a good credit history is important if you want a mortgage (the other two debts you mentioned are not necessary imo and should be avoided) but the only reason you're not creating more debts now is because you have no choice, they won't give you any more credit - not because you have dealt with your debt issues.