Credit card/bad credit score

Ebe_Scrooge

luckybert said:

In the next six months I will be renting my house out so I will have income and in the long term (3/4 years) will be selling my home - maybe I can just manage somehow until then as I don't want to be considered a risk and not get any credit etc going forward.

Fair enough.  In that case I would try and avoid the DMP route if at all possible.  Posting on the DFW board may be helpful - but essentially you need to be stopping absolutely all unnecessary spending and throw every spare penny at the debt.  Loads of advice on the DFW board, including instructions on how to do a SOA.

phillw

Ebe_Scrooge said:
Debt consolidation is rarely a good idea at the best of times.  Switching an unsecured debt to one secured on your home is sheer madness.  If the loan is secured on your house, what happens when you can't pay the increased monthly payments?  Please don't even consider this.  As per the above replies, either cut your costs, increase your income or speak to a debt charity.

Debt consolidation isn't the problem, using a cheap mortgage to pay off an expensive credit card debt would be money saving. There are a couple of issues.

1. There is no point consolidating unless it's going to save you money in the long term, having "one tidy payment every month" isn't a benefit, it's about saving interest by switching to low or zero interest if possible. Lowering the monthly payment by extending the term considerably or paying someone a fee to manage your creditors doesn't help in the long term.

2. Don't fall into "the now our finances are sorted, we can go on holiday" trap (an advert from a few years ago) or you will end up with both a much larger mortgage and be back to the same unsecured debt trap as you currently are. So you're better off going through the pain of living on noodles etc. Debt charities should start off with helping you figure out how to live within your means.

3. Unless you have an offset mortgage with some spare cash then you're going to have to convince your current lender that you can afford to borrow money based on what you currently owe (they probably won't assume that you'll use the new borrowing to pay the credit card bill, even if you tell them you promise you will). Your situation may already exclude you from this option.

If you refuse to pay your existing credit card debts then they can apply for a charge on your property https://www.citizensadvice.org.uk/debt-and-money/action-your-creditor-can-take/charging-orders/ anyway

DCFC79

luckybert said:

Speaking to a debt charity will mean I am declaring myself bankrupt and will affect my credit score yes?

Not sure where you saw that.
If all your doing is talking to them and you dont follow on through with the advice eg start the dmp then your credit file will be ok.

Your credit score is only seen by you only, your history is whats seen.