Starting out - any advice would be helpful…

Lolly25x

Hello, I am new to this and would really appreciate any advice.

I am currently in £7000 worth of debt, this has accumulated over the last few years following a relationship breakdown and going back to university to study.

I have 2 sons (10 and 13), I have recently finished my degree and have been able to secure a job with a £45,000 per year salary.

I am a single parent. I don’t receive any benefits other than child benefit.

I am trying to sort out my finances however I am really struggling.

I have a very low, poor credit score and therefore I can’t balance transfer or get a loan, I have tried and looked into this.

My debt is made up of 1 high interest loan and then 4 high interest credit cards.

I am paying just short of £700 per month towards my debt, but not really making much progress.

1. Due to the interest
2. Due to using the credit cards again

I really try and not use the credit cards and have cut them up, however with no savings I have needed to use these in emergency situations.

I don’t have any family that would be able to help me out with this.

I have looked at DMP, but I have avoided this so far as I was hopefully wanting to build my credit score for the future. I feel that I could pay this off and start to repair my credit within the 6 years.

I stick to my monthly budget, and don’t spend excessively.

I think in my mind I would ideally like to get a debt consolidation loan, that would reduced my monthly payment and allow me a couple of years to pay this off. With an end date. But due to my credit score I cannot get one.

Any help and advice would be appreciated.

MasterG83

Hi, congratulations on your new job, this sounds very positive.

In the pinned posts at the start of this forum you will see an SOA, Statement of Affairs, complete this and then the advice will be relevant by some very experienced people.

RAS

Your credit score is a US fiction sold by credit reference agencies. What matters is your credit record.

You might want to pull all three of your credit records in case there is something unfortunate or missing there. Details of how to do this for free using the Credit Club are on the Cards and Loans section of MSE.

Too many moves, not keeping electoral rolls up to date and multiple credit applications will affect your credit records. As will late and missing payments.

Meantime a copy of your Statement of Affairs (budget) might provide some help. And some indication of your situation, as in London, renting or Northern, mortgage would be helpful.

sourcrates

You haven`t told us much about your personal circumstances, but in general, 7k of debt on a 45k salary would appear on paper to be doable.

However, I`m guessing you`re just starting this job, so it might be prudent to forget about credit scores and further borrowing, stop paying these silly rates of interest, let the debts default, save up the 7k over time and part settle with whoever owns the debts at that time.

This way it frees up £700 of disposable income a month instantly for you, problem solved, debt collection is a very lengthy process that will see months of letters and calls, but little else will happen.

Its a much more sensible choice than to go looking for the bank to bail you out, your credit file will heal with time regardless.