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    If you don't ask, you don't get!
    • #1
    • 18th Feb 11, 8:58 PM
    If you don't ask, you don't get! 18th Feb 11 at 8:58 PM
    Hi, I'm new on here, but have been a browser for a while

    Just wanted to share a success story on my long (but ever shortening) route to being debt free!

    I owe a lot - over 50k - as a result of a combination of things. Living a lifestyle I thought I deserved for a few years (but could not afford) and also, getting stung by a falling market when a relationship breakdown forced the sale of my jointly owned house. So, negative equity, legal fees, moving costs and living the high life for a few years/spending to feel better left me in a bit of a mess!

    I had my lightbulb moment just over a year ago and decided to get a grip and tackle my debts properly and try and sort my crap credit rating out too. The result? In just over 12 months I have:

    - Cleared and closed down a credit card (1800 balance with 2.008% pm interest rate) which I was paying the min balance on and getting no where
    - Cleared a credit card (800 balance, high interest rate) which I kept spending on but would struggle to clear each month
    - Paid off an old joint bank account balance (500)
    - Paid my parents 500 of the 4k I owe them & agreed to pay them a token 25pm moving forward after I admitted the sh*t I was in and explained what I was trying to do!
    - Improved my credit score on credit expert from 327 (very poor) to 999 (excellent)!!
    - Paid a lump sum (8k) to Northern Rock

    How the hell have I managed that I hear you ask? No I didn't win the lottery and it is not a quick fix solution, more a re-jigg and refocus on paying the right things and some negotiating!

    Basically, the key was improving my credit rating. I knew I would be in a stronger position all round by doing this, so I checked my credit report and made some changes to build up my history again. I made an arrangement with Northern Rock and stuck to it and made sure I made every minimum payment every month on my credit cards and loans. I think the thing that made the biggest difference was using my Egg Money card to my advantage - I use it every month for essential spending (food and fuel) and have a DD to clear the full balance each month. These things have all led to my improved rating. I nearly fell off my chair when I saw the score last November! Instead of feeling it was all out of my hands, I felt in control and had the confidence to renegotiate and consolidate my finances.

    I had an existing loan with my bank which I'd been paying for 2.5 years. With 66 months left on the term, I owed about 16k and knew I could maybe go back up to 25k as this is what I'd originally borrowed. After making it very clear why I wanted the extra and making it clear I didn't want to extend the repayment term, I finally got the loan approved (and on a lower interest rate than my original loan!!). I cleared existing credit cards and my 250 overdraft and was left with 8k bargaining power with Northern Rock. In short, in return for payment of this lump sum, they agreed to reduce the interest rate on my outstanding balance by 5%!!! What I have saved paying out on various debts every month, I now use to pay my (rather high!) monthly repayments on my bank loan and I'm now paying less per month to NR but actually am now paying something off the balance each month instead of just covering the interest. Once I've paid my bank loan, I'll use that cash to pay NR and then finally, I can pay back my parents.

    I'll be debt free by November 2016

    I was in a very low place for a very long time, but now feel empowered and positive about my debt free future knowing it is now back under my control. I have trained myself to be meticulous about my finances and have a spreadsheet I use to track everything. I know how much I've got, what is coming out and when and it sounds basic, but its an absolute revelation after buring my head for so long. I live a very frugal life and my only treat to myself is my gym membership which helps keep me mentally as well as physically healthy. I am lucky to now have a very supportive boyfriend who helps me enjoy life, but my debts are very firmly my own and I am determined to clear them.

    I just wanted to share this story to hopefully inspire others and give people hope that where there's a will there is a way and as my dad always says "If you don't ask, you don't get"!

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    Last edited by Former MSE Wendy; 22-02-2011 at 6:32 PM.
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