PayPal Credit

ImInDebt09

Hello,
I have a significant PayPal Credit debt (with high-interest rate) that I need to pay off, as well as an overdraft.
I need to clear them both so that it looks better on mortgage applications.
Are there any loans I could use to pay the PayPal Credit off in one go, as a balance transfer, or maybe a 0% credit card I could apply for without it affecting my credit score?
Should I do the same to clear my overdraft?
Please help.

fatbelly

The paypal debt may not be doing as much damage as you think as Paypal do not report to all the CRAs.

The overdraft is probably the same effective rate as most of them work out to an apr around 40%.

Just make sure you aren't missing any contractual payments and are within your overdraft limit

There are some ideas here on how to deal with the overdraft

https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

As for switching the debt to another loan, I can't see why that would help in a mortgage application. Better to get debt-free

MEM62

Borrowing money does not clear your debt, it just moves it.  Therefore, from an affordability viewpoint, it will have little impact one way or another as far as mortgage application is concerned.  

peteuk

ImInDebt09 said:

Are there any loans I could use to pay the PayPal Credit off in one go, as a balance transfer, or maybe a 0% credit card I could apply for without it affecting my credit score?
Should I do the same to clear my overdraft?
Please help.

Taking out any new debt will effect your credit score, equally paying off debt effects your credit score.  Although as noted Paypal don't report to CRAs.  

MEM62

peteuk said:

ImInDebt09 said:

Are there any loans I could use to pay the PayPal Credit off in one go, as a balance transfer, or maybe a 0% credit card I could apply for without it affecting my credit score?
Should I do the same to clear my overdraft?
Please help.

Taking out any new debt will effect your credit score, equally paying off debt effects your credit score.  Although as noted Paypal don't report to CRAs.  

Good job the lender doesn't see the score then, isn't it?  

EssexHebridean

MEM62 said:

peteuk said:

ImInDebt09 said:

Are there any loans I could use to pay the PayPal Credit off in one go, as a balance transfer, or maybe a 0% credit card I could apply for without it affecting my credit score?
Should I do the same to clear my overdraft?
Please help.

Taking out any new debt will effect your credit score, equally paying off debt effects your credit score.  Although as noted Paypal don't report to CRAs.  

Good job the lender doesn't see the score then, isn't it?  

More to the point - your “credit score” as a single entity doesn’t exist in reality. What lenders are interested in is a person’s credit history - as that’s what informs their decisions around the risk you represent to them. The number that the CRA’s show you is internally just that - a random number, and as said the only person who sees it anyway is you! 

OP - we see SO many people here with PayPal debt now - and my best suggestion for you is to stop using it, and methodically clear it off using surplus from your income each month. Putting together your SOA sounds like a good idea too as if you are using various forms of credit it sounds like you are currently living beyond your means - and that is not a situation to be in if you are intending to commit to the expense of a mortgage. 

Your best plan IMO  is :
SOA which then informs a working budget.
Identify where your money is going - so possibly a spending diary unless the SOA reveals that it is simply your base costs that are higher than your income. 
Assuming a surplus is identified begin to work on clearing the PayPal debt while also making efforts to reduce the overdraft - this I might mean splitting the surplus between the two debts. 

Hold off on plans to apply for a mortgage until you have a better grasp of your expenditure and are no longer using credit. 

Exodi

fatbelly said:

The paypal debt may not be doing as much damage as you think as Paypal do not report to all the CRAs.

peteuk said:

Taking out any new debt will effect your credit score, equally paying off debt effects your credit score.  Although as noted Paypal don't report to CRAs.

Be very careful in your reading @peteuk, I missed a payment to PayPal in 2017 and I can see it on ClearScore (Equifax) and Credit Karma (TransUnion). It does not appear on MSE Credit Club (Experian).

As @fatbelly said, Paypal do not report to all the CRA's, but this isn't the same as Paypal not reporting to any.

Creditors will not check all CRA's when checking an applicant, but I don't think a plan should be based on the hope a creditor checks the credit report with Experian. The best strategy would be that outlined by @EssexHebridean above.

fatbelly

I agree with the above