Another debt from 20+ years ago paid off! Harooo

PostHoc25

😁

So, after taking out a credit card in my mid 20s, landing myself in an awful relationship where he stopped working, I was earning around £4 an hour, and everything then went on the credit card ….

Age just shy of 51, I have just settled the balance of £1958 for £580 with Capquest.

Despite my long-term mental health issues, I never ignored the debt and always paid something since it went into collection in 2008 (£1-£20 a month over the years) and it got bounced between different credit collection agencies but jeeze, I really thought I would have it until I was 70, the rate things were going.

But a few months of serious scrimping, a bank switching bonus, ebay sales, payments that were going to my overdraft which I cleared after 13 years last year, and a refund all added up since last August. I updated my payment to them to £20 a month and detailed my planned Income and Expenditure and said I would get back in touch around May to discuss a settlement. Surpisingly, things turned out a bit better than planned which rarely happens and when I offered £400 to settle this week, they countered with £580.

A couple of days of some serious and careful maths and I realised I could clear it now with just a couple more months of tighter spending. In terms of the emotional burden, getting rid of it, feels like such a relief because it was so linked to the abusive relationship of my younger years, every payment was a jolt back to that awful time.

And exhale 😍

twopenny

Saw your post on the home page. Brilliant! Congratulations! Well done 😄👍🎉

So pleased for you. Credit cards can be a problem because you are forever playing catch-up.

PostHoc25

https://forums.moneysavingexpert.com/discussion/comment/81862078#Comment_81862078

Yes, not great. But mine was on zero interest for a long time. The main issue for me as someone whose life is pretty unstable and unpredictable was not being able to make ad-hoc additional payments. I would have cleared it sooner if they would accept them. They said if I was making £10 payments every month then one month made an additional £15 payment (selling something on ebay for example), their system would assume I could now make payments of £25 every month. Not helpful! But hurrah, it's done.

Thanks for your support! 😍😎

liselle

Well done! I was in a similar situation and oh! the relief when it was finally settled! Like you, I found it so frustrating that I couldn’t pay more occasionally.

MillQueen

Oh wow! Thrilled for you, that’s brilliant. Well done. That must be a weight off you.

SpireCaptain

Congratulations, it sounds like that's a real albatross from round your neck gone. Cutting ties to the toxic relationship sounds such good news MH wise.

Can I just ask after all these years how your credit file is shaping up. Have you been able to take out any credit offers or BNPL? Not sure if you had a mortgage in that time or renting. Has that been affected?

Sorry for questions but I'm on the cusp of a DMP etc but wondering about 6 years plus down the line if I ever needed credit again.

I had no idea you couldn't service the debt with ad-hoc payments. If they're not charging interest you'd think they'd want more money coming in at a quicker rate! Strange business

PostHoc25

https://forums.moneysavingexpert.com/discussion/comment/81862346#Comment_81862346

Yes, I'm currently researching some policy makers to write to about it. Last year I cleared my overdraft by making ad-hoc payments once or twice a month, no issues. I don't think it is fair to restrict the payments of a bit of extra money in a single month. Birthday money, a small lottery win, ebay sale or market research funds are hard to predict, but if someone wants that money to go to their debt, it shouldn't trigger ANOTHER invasive Income and Expenditure report or increase of regular monthly payments.

It's stupid really, from a business perspective they could have had a few hundred extra from me and been earning interest on it for several years - then multiply that by how many customers they have, not prudent from a money-grabbing perspective if nothing else 🤔😁

PostHoc25

Thanks MillQueen

Masively, yes. Thanks. I woke up in a good mood today knowing I was going to clear it! 😂

PostHoc25

https://forums.moneysavingexpert.com/discussion/comment/81862444#Comment_81862444

Thanks,

Yes MH feels lighter already :-) As for the Ad-hoc payments - yes truly annoying and strange. I was still struggling with impulse control so wasn't confident saving extra and not spending funds over a long period of time to then pay down my debt. If you have the willpower, I would say make your agreed minimum monthly payment on your plan and open a savings account just to chuck in odd small windfalls to go towards your debt. Talking to them is crucial, so if after 6 months you can pay more, get in touch and rejig stuff. And absolutely TRY offering an ad-hoc payment because the worst they can say is no, but be aware that they might want to re-assess your financial situation assuming you can now pay more each month.

My credit file journey is messy, so I'll just give my experience in the hope it may shine a light or give some possible ideas for your own situation.

I've been unemployed on and off, hospitalised and homeless at times since age 19. About 5 years ago I started being more intentional about saving and when I turned 50 last year had somewhat of a financial awakening, so started to rethink my finances again and step up debt repayment. Not easy being reliant on benefits for so many years.

When I was working in my teens, twenties and late thirties I job-hopped a lot on minimum wage jobs and never imagined getting anywhere near financially stable. Never had more than a couple of hundred savings, no pension etc just month to month living. Went into council tax arrears for a hundred pounds or so, paid off on a plan, got behind with electric bill, paid it back up. So they were short term debts due to my health impacting my ability to work regularly.

The old credit card I just paid off today, my prior overdraft and also a prior loan I had (which First Direct wrote off unexpectedly back in 2017) were what I deem proper ongoing debts. I ALWAYS communicated with them though and paid something each month. I don't hold with ignoring letters about anything financial, especially debts that I know I have run up myself for whatever happy or unhappy reason.

One of my biggest issues for credit scoring was instability in addresses. I have moved 24 times, sofa surfed, and lived in various bedsits for anything from 3 months to 2 years. Where I am now, I moved into in 2018 and for the first time in a long time had all the utility bills in my name. I also signed up to credit ladder to report my rent payments and in all the places I have lived, I never fell into rent arrears, that bill ALWAYS got paid even if I struggled to buy food.

I needed furniture when I moved here and coped or a couple of years then in 2020 I applied for and was approved £400 with Argos New Day credit card to buy some furniture. I always paid more off than the minimum and a year later was accepted for Aqua credit card and then last year Argos themselves approved me for instore credit on interest free BNPL (Last August I was able to buy a new mattress to replace my budget thin Ikea £60 one I'd had for 7 years!) But I had applied the year before and been denied for in-store credit.

I closed the old Argos New Day card this week as I only use the Aqua one occasionally now.

I also got pre-approval for a post office credit card last year which they then wanted three months of bank statements for and proof of income which I didnt follow-up with as I knew if they hadn't 100% accepted me, it would be a faff for potentially no card at the end.

I have also been able to access Klarna and Clearpay for a few years and NextPay for clothing. I got accepted onto PayPal in 3 last year after trying for a couple of years, but I still can't get approval for PayPal credit as I am unemployed.

My rule since starting over at this address was to only borrow up to the amount of what I had saved up in various savings accounts. That way, I would never get into arrears because worst case scenario I would just empty my savings to pay everything off.

NextPay I found particularly helpful as I have a nightmare finding clothes that fit and end up getting a couple of sizes of the same item ususally. I can then return the ones that don't fit and immediately return them. The refund goes onto my account so it's not a faff waiting for funds to go back into my bank. And then when I know what I am keeping, I immediately pay off the NextPay balance. Both NextPay and Aqua have increased my credit over time and they are both at a limit of £4K approx which is ludicrous to me as the most expensive purchase I ever made was a replacement computer for £550.

My credit score is very good, but I have little affordability due to my Universal Credit going on daily living costs (mostly high rent) so I still don't look like a safe bet to a lot of lenders.

All of which is to say, NOT missing payments and keeping a stable address has probably been the biggest help to my file. My credit card was in debt collectors hands since 2008 but because it is so old now has no bearing on my credit record and hasn't appeared on it for years and years. Also having employment rather than benefits is obviously a huge green flag for most lenders.

Having now switched from NatWest to Nationwide, I would like them to take over the Aqua Credit card for ethical reasons. But I really doubt they will accept me yet so want to bank with them for 3 months before applying.

There is a way back from being on DMP but obviously we all have unique histories credit-wise but if you keep up-to date, increase monthly payments when you can and don't go silent on them, you should hopefully be stable enough to build back credit worthiness.

I have no clue if any of the above will be of help, apologies for going on so long, but it's not a simple situation and I did want to try and give some insight. 😀

(re: mortgages, I had one on my own and one with a partner but YEARS ago and the lending criteria is so different now. We got 95% mortgages both times with low deposits which I feel is pretty much unheard of now, one porperty was £59,500 to avoid stamp duty, the other was £135K so I'm not sure my experiences would be relatable to your situation and mortgages being what they are. The above stands though, work hard to stay on top of things as you repay your debt, because it won't harm the likeliehood of mortgage approval if you meet all the lenders other criteria.)

SpireCaptain

Absolutely fantastic, detailed answer to my questions. No need to apologise at all.Really very helpful, quite a life's journey already lived I must say. You're a credit to yourself keeping your head and always heading in the right direction especially the last 5 or so years.

I'll reply properly tomorrow as eyelids closing on me but thank you again. It gives me hope for the future. Uncertainty at the moment but the fact that it can be recovered is a relief.

PostHoc25

https://forums.moneysavingexpert.com/discussion/comment/81863024#Comment_81863024

You're very welcome. Slow and steady with these things, I find. 😊