hi guys just woundering if you can help

im nineteen and ive had a credit card for a year.
then i got another one
and and overdraft.

now in a few years time and believe me and tony will be wanting to get a morgage

i dont think i have really good credit history to be honest

credit card one is over its limit by £60 but i do make regular payments its limit is 1000 and its 1060.

second credit card is over by £116 i do make regular payments on this too but its minimum paymenst £250 limit and its atr £366.

and i have an overdraft of 450 and i always go over that each month and get them letter saying money tried to come out but not enough in account.


does that mean i have bad credit history......?
will i not get a morgage in a few years time because of what im like now.?
how long does it take till bad credit in this form is wiped from yor record and you can get credit again?


help me please im really scarred


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Hi
It can be easier to get a mortgage even with a dodgy credit history since it is secured on your home. It might be easier to try to consolidate your loans though. Credit cards are super expensive loaning. Lets look at how much you owe:
£1060 Credit card
£366 Credit Card
£450 Overdraft =£1876 total borrowings.

I would recommend that you go to your bank or another one and get a loan with a lower APR...Tesco do some that are quite cheap. Borrow £2000 then you will have a little left over, spread it over 5years and your monthly repayments should be less. Hope that helps.
I've been in your situation, you might have to live well within your means for a while but it will be worth it in the end. Also, put all your change in a jar or bottle and count that when it is full. Put it in your bank. That can add £100 a month or more.

You could try applying for a CC with interest free balance transfer and transfer the current balances to them. I'm currently paying off my motorbike like that!

Have a look at this webpage: http://www.moneysavingexpert.com/ This is the bloke who does the money slot on the afternoon show on Radio 2. I've followed quite a bit of what he says and I've cut down our bills by £300 a month.

You definitely need to swap your balances to a zero interest card.

taloola don't worry there are lots of companies out there who offer mortgages to people with bad credit ratings; & much worse than yours, too! Some companies will give mortgages to people with CCJs, & it doesn't sound like you're anywhere near that point yet.

I agree that consolidating to get payments you can afford & then keeping them up can only help your credit rating in the meantime (especially as some companies may only look at your last few months' payments), but whatever happens you will find someone who will give you a mortgage - worst case scenario is that you'll have to pay a higher than average interest rate.

I agree with consolidating your CC and OD into a low cost loan from somewhere.

I’d like to offer some advice…. You have come to realise now that you might have a problem in the future which is very sensible thinking.

What you need to avoid is missing payments with your creditors and then getting to the stage of CCJ’s (County Court Judgement) these are what mess up your credit and will put the dampners on getting a house later on.

If you default one payment it’s never a problems, but when it happens a couple of times it can be….

I would definitely look into getting a loan to pay of your CC and cut them up!

I was £11,000 in debt in 2000 / 2001 and I tried everything to lower my debts, my credit was 0 and I was sick of getting letters and letters from companies offering me more money. I had tried in vain to reduce payments and even after still setting up payment plans and stuff I was still struggling and at most points I could not even afford to buy food….

I’d already got one CCJ from a store card I ran up to £500 when I was 18, you would have thought this would have taught me a lesson but it didn’t and I built up my next debt to £11,000 in almost 18 months.

It was the fact I had a CCJ already that I was approached by a credit card company known as Capital One who offered me a CC to get me back on track, and to re-build my credit history. Of course I took the chance little did I know how much the interest was. I started out with a low credit limit of £250 but that was soon increased to £500 then £1000 and in the end I owed £3000 on that one card.

I took drastic action although not advised but I was renting my home and had nothing to lose so I declared myself bankrupt. At the time and even now it was the best thing I ever did. I went to court and it lasted less than 10 minutes and I came out £11,000 lighter. Because my debt was less than £20,000 I was only bankrupt for 2 years.

4 years have passed now, I still can’t obtain credit and I expect this is because for most people it’s on file for 6 years. I have a sensible job and I still rent the same house.

I still say it was the right thing to do, with house prices the way they are I could not afford to buy anyway as I am single.

The only real downside for me is I seem to be limited to the kind of bank account I can get and that is so annoying. I would love to own a debit card makes life so much easier but most banks refuse because of credit scoring, yet I find this so annoying as I am not asking for credit. I don’t want a loan, I don’t want an overdraft I would just like to access my own wages a lot easier than having to keep withdrawing money from the bank!

At least now you realised you might have a problem, so please act on it now, don’t let it get out of control like I did.

Hi all,

Just wanted to respond to Mazarin re: difficulty in getting a debit card after bankruptcy..... I declared myself bankrupt 2 1/2 years ago, and a few months later opened a First reserve savings account with Natwest...although technically it is a savings account, I still get a Solo card which is brilliant, as most places that take Switch also take solo, and I can still set up direct debits on the account. I agree, bankruptcy was the best option for me....£33,000 debt at the age of 26 was not a fun thing. Now, i am more free and in fact don't ever want credit again.

As to a mortgage....I am happy renting at the moment and am a full time student, so even if I did consider buying it wouldn't be for a long time in the future. I think our society is geared up to make us fall into the debt trap and to feel that we all must 'get on the property ladder' - why?? The way I see it is that one day I may buy a house, and have a mortgage, but then I will die and will have no need for a house ...alternatively I may rent for the rest of my life and then one day I will die and have no need for a house either. Live in today and do the right thing for today...don't worry about whether you may want to borrow money a few years down the line. And also remember, by the time you pay a mortgage off, you could have bought about 3 houses for the same price that you bought one.

Anyway, off my soapbox now.....

Much love
Luna

I'm glad there is someone in the world that thinks like me. I can't see rent as dead money. It pays for a roof over your head. I will never own a house, I have never been stable enough, and now my partner has massive debt issues so we will never be able to get a mortgage and my income is too tiny for me to get one on my own.

It doesn't worry me though. We have no kids, so no one to leave a house to, and this way, i have no ties, if I want to move back to Australia, or go travelling, or work abroad as a volunteer........

As well as getting your debt under control, try and get a savings record, that impresses mortgage companies, if they can see that you are able to manage your money so well that you can put some away each month.

Thanx for that advice, I didn't know they did such an account.... I will be applying this morning!

I do have one of those cashminder accounts at one bank but it only offers a simple cashcard, and considering I am paying my wages in everymonth and all my DD + SO go on on times and never bounce, I get annoyed that they won't upgrade the account!

But great advice on Natwest, Debits card to me are great to have because you can shop online so much cheaper, currently at the moment anything I need online, I use my mums or dads and give them the money, and at 28 years old it can be a little annoying!

I work for a financial organisation and hope this helps a litttle:

Different companies 'Credit Search' you differently and all have different levels of risk that they will accept.

Most will search you on:
- the current level of credit that you have, i.e. are you overstretched?
- how well you maintain those credit agreements, i.e. do you have missed/late payments
- Do you have any CCJ's?
- How many times have you been credit-searched? Every time you are credit serached it leaves a 'footprint' in your credit file. Some companies frown on this as they think you are over-stretching yourself or have been turned down and could be shopping around.
- Some credit companies search thye address and not the person, so if you are living with someone who has 'bad debt' you may struggle to get finance.

Credit Companies usually look at 3 years worth of credit history.

If you are thinking about a mortgage in the future I would think about getting your finances in hand now, as this could improve your credit history as late/missed payments can show up on your credit history. It's never too late to turn the situation around

Try speaking with your bank/credit card companies to see if you can get your limits increased temporarily. Alternatively, you could shift the balances on your credit cards to a card that offers 0% interest, at least you would only be paying off the balance and not having interest added on top.

Be careful of these companies that 'consolidate' your loans as they usually offer a HIGH rate of interest, and you'll be paying the money back for FAR longer!

Another option is to speak with your bank and see if they offer some sort of 'financial planning' advice. Most banks do. It is in your interest to get this sorted as banks profit from slapping on charges and late penalty fees when you go over these limits. I had a friend who's overdraft was once made up of £200 of charges!

Hope that helps!

By the time you've paid one mortgage off your house will be WORTH THREE TIMES AS MUCH AS WHAT YOU PAID FOR IT I would advise anyone to get on the property ladder A.S.A.P. instead of lining someone else's pockets even if you've no-one to leave it to..you could always sell it and live the rest of your days in comfort instead of struggling on a pension

Good luck with clearing your debts Taloola. I've been paying off my credit card for 18 months now and am down to the last £800, any sacrifices you have to make now will be worth it in the long run for that feeling of relief when the end is in sight. Have you tried Citizens Advice Bureau? They have a debt management service that could be quite useful to you

@ Luna.... I have my first reserve account now, got a response in a couple of days and am just awaiting the card now... much more convienent...

Hi Mazarin,

So pleased to hear you have the account sorted out...you can now return to the land of the living with your debit card! I thought the logistics of life and bill paying etc would be so difficult after bankruptcy, but fortunately not with good old Natwest.

Luna
xx