credit card debt

Rik_Wise

Hi i have a credit card that I couldn't keep up the payments with, at the time they contacted me and told me I didn't have to anything if I couldn't afford to pay. I am looking to buy a car and this is stopping me get better rates for the loan, it has been about 4 or 5 years since I last paid a payment. what is the best way of resolving this so I can apply for a car loan.

Thanks
Rik

[Deleted User]

How does it appear on your credit files?

Assuming it's showing as a default, then settling it would look better. Failing that, you wait for it to fall off 6 years from default.

Ebe_Scrooge

In addition to the good advice posted above, I would suggest that you carefully consider whether taking out a loan for a car is a wise choice.  I fully appreciate that your circumstances may have changed a great deal in 4 years - but taking out a loan in order to buy a depreciating asset is really only something that should be considered if you have a reasonably high disposable income.  Far better to use savings to buy a cheaper car outright.

That aside, a default (if it's marked as such on your credit files) will almost certainly mean you're unlikely to be offered the best rates for a loan.  Whilst an older default is less of an issue than a more recent one, most lenders will still factor it in to their decisions.  What is your credit history like apart from that - do you have any other negative markers on your files?  Or is your history squeaky-clean since the default?

Rik_Wise

Thanks for the advice, I was on a debt management programme which finished in 2015, I then fell into the same trap a couple of years later as our circumstances changed, my wife’s income disappeared through illness.. I have checked my file and it’s not the best but I have only got this credit card on it that seems to be the issue.