(urgent) Low Credit Score Loan

aarondlr · 11 June 2018 at 7:37PM

Let's just say I have been neglectful of my credit score for the past two years. But, I do need a loan and am wanting to set things straight now moving forward. I was responsible at first, but have let things slip.

I have two credit cards and some personal debt to friends/family. I just want to understand the best method to resolve this and if anyone has any suggestions before I go ahead.

I have a 0% MBNA credit card with the majority of the debt here with three balance transfers:

£2,074.37 until March 2019
£3,288.88 until Oct 2018
£1,242.00 until July 2018

Then the interest rate goes up to 18.9% afterwards. I need to payoff the previous ones stacked on top before I can pay off the £1,242.00 for example.

I then have a HSBC credit card with around £4,000.00 (16.9%) which is mainly interest I am paying on the payments. I then owe around £1,750.00 in personal debt to others.

I have looked into a loan with HSBC and was being offered £13,000.00 at 16.9%. I actually want to reduce this original request to £10,000.00, hopefully this will reduce the monthly payments.

My original plan was to payoff the MBNA card then move the £4,000.00 to here on a promotional for 0% until 2019. However, I'm now very confused on what to do now that I have learnt the rates that I have at the moment.

I just wonder if anyone can help with some suggestions, or where to look with low credit score?

[Deleted User] · 11 June 2018 at 7:45PM

You don't have a credit score.

Is there something on your credit files which you think will be a problem? Have you looked at all three? What do they show?

aarondlr · 11 June 2018 at 8:08PM

How do you mean looked at all three?

For the past couple of months I've been reaching an overdrawn overdraft. Plus, I missed a CC payment around December time which messed things up.

[Deleted User] · 11 June 2018 at 8:10PM

Experian, Equifax, Call Credit.

You need to see what is being reported, as that is what lenders will look at.

aarondlr · 12 June 2018 at 10:01AM

My HSBC accounts are registered at my Mum's address and I always have had it registered there. I always thought that this be best and also best for applications. However, I have since learnt that this might not be the case.

I will fill out those assessments as you have advised, but anything that I should be posting here to get further advice?

[Deleted User] · 12 June 2018 at 10:27AM

Once you've found out what is on your credit files, you'll be in a better place to know what to do. If you have inconsistent addresses, that may cause some concern.

Lenders will look at your history, debts, available credit and income. An eligibility checker will help give you some idea of your options.

If you're still confused, post back here with the details and you'll get some educated guesses, as well as some uneducated ones.

foxy-stoat · 12 June 2018 at 11:15AM

Yeah I think you should just stop trying to think you can borrow your way out of the debt you are in.

Taking out a £13,000 or £10,000 loan at an interest rate of just 2% less than you will be paying when the balance transfer rate ends isn't going to help you very much, you will save only marginal interest but will allow to you double your debt if you haven't addressed how you got here in the first place - I have done exactly that many years ago.

How much were the original balances when you did the 3 balance transfers and how long ago did you do them, how much do you pay each month?

The plan for balance transfers to work is to budget to pay them off before the promotion rate ends or you end up parking the debt (and paying the minimum payment) by clearing the card you ran up the debt on ready for you to spend again and do the same thing.

System · 12 June 2018 at 11:31AM

As well as a poor credit history your income is going to play a part, I expect you'll need north of £20k a year. When you get a consolidation loan lenders will assume there is a high probability you won't be paying off any or all of the loans/credit cards you currently have so base their affordability tests on what you want to borrow plus your existing debts.

aarondlr · 12 June 2018 at 3:37PM

Working quite a bit recently. But, I managed to complete the Equifax check and received a credit score of 366.

Oddly, it's not showing that I'm on the electoral role. My name gets confused quite a lot as it has spaces in it. Plus, my address is sometimes listed as flat 2, or B - gets very confusing. How badly does this effect it?

Anything else I should be sharing for opinions?

[Deleted User] · 12 June 2018 at 3:39PM

aarondlr wrote: »

Working quite a bit recently. But, I managed to complete the Equifax check and received a credit score of 366.

What did we learn about credit scores earlier? You don't have one. They don't exist.

Have another look at your report and see what data is appearing there. Accounts, limits, payments, etc. Apart from the ER, what, if any, negatives are there?

aarondlr · 12 June 2018 at 3:47PM

foxy-stoat wrote: »

Yeah I think you should just stop trying to think you can borrow your way out of the debt you are in.

Taking out a £13,000 or £10,000 loan at an interest rate of just 2% less than you will be paying when the balance transfer rate ends isn't going to help you very much, you will save only marginal interest but will allow to you double your debt if you haven't addressed how you got here in the first place - I have done exactly that many years ago.

How much were the original balances when you did the 3 balance transfers and how long ago did you do them, how much do you pay each month?

The plan for balance transfers to work is to budget to pay them off before the promotion rate ends or you end up parking the debt (and paying the minimum payment) by clearing the card you ran up the debt on ready for you to spend again and do the same thing.

Yeah, I'm taking that responsibility on now. Reasons I got there, is mainly because a messy break-up with an ex that I lived with on existing debt that I had taken out with them. Some of it due to frivolous spending on social life, but kicking that to the curb now.

The problem that it will resolve is that I can consolidate my debt with friends/family.

Is it possible to pay off the HSBC loan in chunks if I get sums of money? Or, effectively will I be subject to that interest?

I'm thinking now that I take out a smaller loan to consolidate the HSBC debit card and the debt with family/friends.

(urgent) Low Credit Score Loan

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