Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
Chat

Join the discussion and chat with other Mumsnetters about everyday life, relationships and parenting.

Original poster

Have I been managing my credit card wrong ? Trying to improve credit rating

150 replies

Creditrating · 01/01/2023 17:57

I have a rubbish credit rating and about 60k of debt

recently got a credit building card and used it but each month I don’t pay the minimum (which is usually 10-13 pounds) I will pay £40 or £50 instead.
just read somewhere that actually you should use it and pay off in full each month and that’s what increases your credit rating so have I now made mine worse ???

OP posts:
Original poster
Creditrating · 01/01/2023 19:21

MoscowMules · 01/01/2023 19:20

"we" are there more than one adult responsible for this debt?

Show quote history

I say ‘we’ as I’m married but technically it’s all in my name as it was all for me

OP posts:
Haffiana · 01/01/2023 19:25

Get yourself over to Martin's Money Saving forums and find the debt forum. There are incredibly knowledgeable people on there that can help you draw up a plan that works for you, and give you proper advice.

But going it alone and listening without properly understanding to stuff like the credit card rating and getting it completely wrong must stop. Social Media is not the place for financial advise.

Fleabigg · 01/01/2023 19:25

If you have £60k unsecured debt then tinkering around the edges with a credit builder credit card seems completely pointless. Even if you had one and paid it in full every month, you still have the £60k debt which is what will more than anything else affect your ability to get credit.

Interested in this thread?

Then you might like threads about these subjects:

Debt General money
SadOrWickedFairy · 01/01/2023 19:29

I am surprised you got the credit builder card with your credit rating which must be through the floor @Creditrating .

However, as others have said you need professional advice to sort this out. Your need to have the DWP payment not counted won't happen, it will be classed as part of your income, which it is.

You should have stuck with Stepchange, you would be a lot better off now if you had, your debts would have had the interest frozen and you would have been making some inroads. Yes it would have been a tight budget, if you felt they were leaving you too little to live on you could have negotiated with them to pay a lower payment over a longer period of time.

Original poster
Creditrating · 01/01/2023 19:33

SadOrWickedFairy · 01/01/2023 19:29

I am surprised you got the credit builder card with your credit rating which must be through the floor @Creditrating .

However, as others have said you need professional advice to sort this out. Your need to have the DWP payment not counted won't happen, it will be classed as part of your income, which it is.

You should have stuck with Stepchange, you would be a lot better off now if you had, your debts would have had the interest frozen and you would have been making some inroads. Yes it would have been a tight budget, if you felt they were leaving you too little to live on you could have negotiated with them to pay a lower payment over a longer period of time.

They were just taking away my child’s dla and that meant they couldn’t have the therapy they need so I couldn’t do it . I’ve had someone tell me that I can add the dla amount though and then put down expenses for the exact same amount so it won’t be counted which i might try eg £240 dla / £240 therapy invoice

OP posts:
BrownEyedGhoul · 01/01/2023 19:36

Creditrating · 01/01/2023 19:14

I have been repaying it though - I’ve been making more than the minimum payment each month for 9 months now .
With the other debts it’s not as if I’m ignoring them I make token payments so I think it’s a bit mean to say I’m a thief

Show quote history

No, you have not been repaying it.

So if you spend say 300 a month on the card, and the minimum payment is say 20, and you pay 50...what did you imagine the remaining 250 a month is? Free money? That's building up every month, how did hyou plan to pay it back when it increased constantly and you can't even pay towards tje massive debt you already have?

I can't see your thopught process here at all.

CockSpadget · 01/01/2023 19:39

If you could afford to pay £40-£50 a month on a new credit card, why hadn’t you allocated that £40-£50 to the existing debt? If stepchange worked out you had hundreds left over at the end of the month to go towards your debt, then you’ve either given them incorrect income/outgoing figures, or you do have hundreds to go towards the debt. If it’s the 2nd scenario, why are you only giving token £1 gestures?
And why on earth do you need to rebuild your credit rating? (Which is completely impossible if you have £60k worth of debt anyway) The last thing you should be thinking about is more credit.
I think you need to re contact stepchange or CAP, because this situation could turn on you pretty quickly. The creditors won’t just go along accepting £1 a month forever, they will start pushing you for more, and may force you into bankruptcy without you having a choice.

Original poster
Creditrating · 01/01/2023 19:44

CockSpadget · 01/01/2023 19:39

If you could afford to pay £40-£50 a month on a new credit card, why hadn’t you allocated that £40-£50 to the existing debt? If stepchange worked out you had hundreds left over at the end of the month to go towards your debt, then you’ve either given them incorrect income/outgoing figures, or you do have hundreds to go towards the debt. If it’s the 2nd scenario, why are you only giving token £1 gestures?
And why on earth do you need to rebuild your credit rating? (Which is completely impossible if you have £60k worth of debt anyway) The last thing you should be thinking about is more credit.
I think you need to re contact stepchange or CAP, because this situation could turn on you pretty quickly. The creditors won’t just go along accepting £1 a month forever, they will start pushing you for more, and may force you into bankruptcy without you having a choice.

I do have discalculia so I think I’ve just got things incorrect

OP posts:
Original poster
Creditrating · 01/01/2023 19:45

I think I just had seen in places about having a good credit score so thought it was something I needed to do - not to get more credit but just to have a better score so when I looked up how to it said about credit building cards so that’s what I did

OP posts:
CockSpadget · 01/01/2023 19:46

@Creditrating did you tell Stepchange that? Because they usually fill the forms in with you over the phone, and ask you all your incomings and outgoings, then tell you how much you have left over per month.

MoscowMules · 01/01/2023 19:47

Oh you are married.

Ok I'm going to say, you must speak to stepchange and CAB now.

I thought you were the sole income and sole debtor, my apologies.

You must take professional advice on this now. If any of that debt is joint, if you claim bankruptcy the creditor can approach your husband then for the full amount.

Get professional help OP.

PinkFrogss · 01/01/2023 19:49

I think you’re worrying too much about what is counted as income, it’s doesn’t matter if the DLA is counted, just that they are adjusting your repayment for your necessary monthly expenses. They wouldn’t expect you to be homeless, reliant on food banks, and have 0 new possessions. They work with you to come to a sustainable plan.

On a separate note, are you sure you are claiming absolutely everything you are entitled to? Might be worth double checking that.

If you wanted to post your income and expenses we might be able to help with your budget as well. It sounds like you’re spending more than you’re earning in which case you’ll never be truly debt free.

PinkFrogss · 01/01/2023 19:51

Also do you rent? Get on the list for council housing if you’re not already, having a child with a disability should make you a bit more of a priority.

With all the debt you’re in a very precarious situation housing wise, if you were to be evicted.

Original poster
Creditrating · 01/01/2023 19:52

PinkFrogss · 01/01/2023 19:51

Also do you rent? Get on the list for council housing if you’re not already, having a child with a disability should make you a bit more of a priority.

With all the debt you’re in a very precarious situation housing wise, if you were to be evicted.

We are already in council housing luckily

OP posts:
Original poster
Creditrating · 01/01/2023 19:53

MoscowMules · 01/01/2023 19:47

Oh you are married.

Ok I'm going to say, you must speak to stepchange and CAB now.

I thought you were the sole income and sole debtor, my apologies.

You must take professional advice on this now. If any of that debt is joint, if you claim bankruptcy the creditor can approach your husband then for the full amount.

Get professional help OP.

All the debts are in my name though so I probably am solely responsible but I said ‘we’ as obviously it’s household income

OP posts:
PinkFrogss · 01/01/2023 19:55

Creditrating · 01/01/2023 19:52

We are already in council housing luckily

Show quote history

That’s really positive OP, and gives you more options.

For your car, could you look into the notability scheme and see if you qualify? This would mean bailiffs couldn’t repossess your car, and would mean you don’t have the financial pressure of your car breaking down or needing anything fixed

Eastie77Returns · 01/01/2023 19:56

This thread is an example of why financial education must be included in the school curriculum. I am not criticising the OP. I was pretty bad with money when I was younger and would have benefitted hugely from a better understanding of how credit cards and interest rates work.

OP - the MSE site is a great resource. Post your Statement of Affairs (SOA) on there with your debt listed together with your income & outgoings and you’ll get some advice. But in addition to that you urgently need to get professional advice. You are not improving your Credit Score because you have a large amount of debt relative to your income so taking on another card will not help. What are you hoping to achieve by’ building a better score‘? No responsible lender will give you a credit card or loan at this point or in the near future so your score is immaterial.

Original poster
Creditrating · 01/01/2023 19:58

PinkFrogss · 01/01/2023 19:55

That’s really positive OP, and gives you more options.

For your car, could you look into the notability scheme and see if you qualify? This would mean bailiffs couldn’t repossess your car, and would mean you don’t have the financial pressure of your car breaking down or needing anything fixed

Show quote history

Sadly we don’t get the higher rate to qualify for it

OP posts:
PinkFrogss · 01/01/2023 20:00

Creditrating · 01/01/2023 19:53

All the debts are in my name though so I probably am solely responsible but I said ‘we’ as obviously it’s household income

Show quote history

Was it really you that wracked up all the debt with personal spending or did any of it go towards household or child related expenses? If it was all your personal expenses do you not have access to enough money?

Having so much debt all in your name when you’re married is a bit of a red flag for financial abuse, apologies if I’m way off the mark

Original poster
Creditrating · 01/01/2023 20:02

PinkFrogss · 01/01/2023 20:00

Was it really you that wracked up all the debt with personal spending or did any of it go towards household or child related expenses? If it was all your personal expenses do you not have access to enough money?

Having so much debt all in your name when you’re married is a bit of a red flag for financial abuse, apologies if I’m way off the mark

Show quote history

Mostly for me (for medical and therapy) some of it on childcare and a few household expenses as I couldn’t work for quite a while
Definitely no financial abuse

OP posts:
Lou898 · 01/01/2023 20:08

Your credit rating will not improve while ever you are paying token payments towards existing debts as this signifies you are not capable of taking on further borrowing. So as regards the card It is irrelevant how much you pay.

Allmyarseandpeggymartin · 01/01/2023 20:09

You’d be better off going bankrupt longer term op especially if you’re in council housing. Nothing to lose by not paying

Ricardothesnowman · 01/01/2023 20:14

OP, I've not read the full thread yet, but one thing jumped out at me.
Is the DLA for your DC? In which case it isn't your income, its thiers. So are you sure it can even be included as your income?

SirGawain · 01/01/2023 20:25

With a dept of £60k your credit rating is the least of your worries!!!

Original poster
Creditrating · 01/01/2023 20:26

Ricardothesnowman · 01/01/2023 20:14

OP, I've not read the full thread yet, but one thing jumped out at me.
Is the DLA for your DC? In which case it isn't your income, its thiers. So are you sure it can even be included as your income?

That’s what I thought but stepchange said it was counted as income. What I should have done was explain about expenses as we use it for therapy. That’s what I’m going to try if I get back in touch with them I think previously the call was so long, I was struggling as have discalculia and had dc with me so I was trying to look after them too and I was stressed so hadn’t said what I needed to about it being needed for therapy so essentially an expense

OP posts: