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Original poster

To be really down about our financial situation - debt and no mortgage

59 replies

user1467032004 · 27/06/2016 14:04

I was wondering if anyone has experienced anything like this or has any general advice.

My partner and I are both 25, we really want to buy our own house but it seems impossible at the moment and it's really getting me down.

Unfortunately, we both have poor credit ratings. Mine is very poor from a store card I had about 5 years ago (£400 debt!) which I ignored and has since defaulted. My boyfriend is the same - his is poor due to a few missed loan repayments which he is now paying off (£1000). From what I've seen online, it looks like these will remain on our credit records for 6 years before we are back to normal again.

Is there any way we will be able to clear this before 6 years and get our own mortgage? We want to have children soon and we both earn a decent wage but due to our stupidity when we were 21-22 we both won't even get credit for a new car.

Thanks.

OP posts:
Just5minswithDacre · 27/06/2016 16:28

Right, start at the beginning and work out how long until the bad stuff drops off your credit reports.

You had the store card five years ago. Do you know exactly when the default was? If that is your last big blot on your files, then six years from then is when your files will be clear and that's the date to aim to be debt free (and have a small deposit) by.

Get a proper credit report from all the three CRAs (Equifax, Experian, Callcredit) for each of you to check there's nothing else iffy on them. Don't bother with the secondary credit sites like clearscore.

You can get printed statutory reports by post or email for £2 per person per agency, so £12 total.

These will also help jog your memories on debts and balances so that you can compile a complete list of everything you owe.

Just5minswithDacre · 27/06/2016 16:33

Once you have a list of all your debts and a date when your credit files will be clean, look at your income and outgoings and set a plan for clearing debt and saving in that timeframe.

Look at 'snowballing' on the MoneySavingExpert site and also their information on budgeting to help with that.

A low-limit credit card and/or SIM only mobile contract will help yo establish a record of repaying debt responsibly IF you trust yourself with it.

Capital One has a pre-application eligibility for its cards. Barclaycard Initial has a similar one. MoneySavingExpert has one that checks a range of subprime cards for you. None of those leave a footprint of the search on your credit files.

If you do all of that, you'll have made a good start Smile

CiaoVerona · 27/06/2016 16:41

Yes, you can fix this by paying all debts on time as agreed include all utility bills as they now report out too, over time your credit profile will improve the positives will outweigh the negatives while your score will adjust accordingly. You could speed up the process by getting a pre-paid credit card with low limit making sure its paid in full every month.
Lastly, if you follow the above you will find lenders who will underwrite based on your situation they will look at the variables as opposed to main stream lenders declining automatically.

Original poster
user1467032004 · 27/06/2016 16:42

Thank you so much everyone. I had a look at Experian and it seems I owe £1000 - maybe interest has been added? Can I phone up the debt collection agency and start to make payments even though it dates back to 2011? Blush

OP posts:
OurBlanche · 27/06/2016 16:45

STOP! When did you last make a payment on that 2011 debt?

Original poster
user1467032004 · 27/06/2016 16:48

Blanche, back in 2012 I think - I have buried my head in the sand and really want this weight off my shoulders now. I know, I've been so irresponsible - I just hoped it would go away.

OP posts:
Want2bSupermum · 27/06/2016 16:57

Check with the CAB because after a certain amount of time the debt is written off. Also, if it is showing as £1000 CAB can advise you on your options to pay off that owed money. It might make sense to call them up and agree on a lump sum which will be considerably less than £1000.

At this point don't worry about your credit score. You need to learn about personal finance. I suggest borrowing from the library a book by Suze Orman, borrow a book called the automatic millionaire, or take a gander through MSE.

I find it incredible that you are living at home, assume you pay no rent, and have not saved money while doing this. You need to learn how to cut your expenses down. There are wants and there are needs and if you spend too much on wants you have no savings left.

mouldycheesefan · 27/06/2016 17:01

You aren't ready to leave home, sorry, let alone get a mortgage. You have debts of £1000 that you haven't made a payment on for 5 years. Take the advice above re the debts, stay at home and pay it off and save up for a deposit on a house. At the moment can you afford to rent if you leave home? Do you have A deposit and months rent? As it doesn't sound like you do. Csn ypu afford council tax, utilities, insurance etc? Just if you haven't saved a penny or paid a penny off debts whilst living with mum and dad I can't see how you will stretch to liVe independently

OurBlanche · 27/06/2016 17:04

Check the moneysavingexpert site for statute banned debts. You aren't there yet (6 years), but it might be worth reading up on it and what happens when a debt falls off your record

I am still being chased by Link (gobshite bastards) for a statute barred debt they just won't let go of. It wasn't a real debt in the first place and they are relentless. I can happily ignore them as mine is definitely statute barred.

But, if your debts are only £400 and 1K then you should be able to set up a payment plan, they may agree to reduce some of the interest, again check with consumer sites like moneysavingexpert.

You really aren't in a bad position. But you might be focussing on the debt and not being home owners far too much.

The debt you can deal with, do some reading, get some advice, start paying it off.

The housing situation you might have to rethink. We're in our 50s and only bought a house last year! Panic not. We loved our lives in various rented houses. It doesn't mean you have failed or have to live poor, second class lives.

harshbuttrue1980 · 27/06/2016 17:11

How badly do you want a place of your own? If its your priority, then you'll have to make huge sacrifices. I'm in my mid 30's, living in SE, working as a teacher (decent salary but not loaded), renting, no parental help. I'm finally going to be in a position to buy a flat (not a house, a flat!) this year. What I did was:
-went virtually teetotal - saved on alcohol and taxis and just drank coke when out with friends
-took on additional jobs - exam marking in hols and tutoring on weeknights
-drive a banger
-haven't been out of the UK for 5 years
Its a question of priorities. I'm not saying I'm something great for doing these things, just illustrating the sacrifices Miss Average has to do to get on the ladder. You mentioned not being able to get a loan for a "new car" - stop right there if you want to buy a place, and accept that you're not getting a new car for years to come. Have you booked a holiday for this year? If so, cancel it. Do you both have second jobs? That's what you have to do if you want a place of your own. Or, live your life and enjoy it (my life has been a bit joyless at times), and accept you're going to be a renter for longer than you hoped to be. It's your choice, pros and cons with both decisions.

BeverlyMaccer · 27/06/2016 18:45

I got in real shit ccjs bailiffs and all sorts between the ages of about 20 and 27, I reckon it was over 20k in total Shock Blush

got a small catalogue account at around 30, maintained it well and i am 36 now and got a mortgage last year no problems

I didn't think I would get one but before I applied for the mortgage, I looked at my credit file (with a few different providers) and to my amazement it was totally clear

honestly don't worry about buying in your 30's, most people I know didn't buy till at least 30. just try and clear the debts and you will be fine

BeverlyMaccer · 27/06/2016 18:49

oh just seen you haven't made payment since 2012

DO NOT MAKE PAYMENT

its statute barred after 6 years

just avoid the fuckers till then Grin

BeverlyMaccer · 27/06/2016 18:51

And don't acknowledge the debt to them either, ie don't get ringing them up and making a payment plan

(sorry for all the posts Blush )

AyeAmarok · 27/06/2016 18:56

If you can only save £100 while you're not even paying off your debt (of what is an extremely tiny debt in comparison to a deposit for a home) and you're living at home, then there is no hope on hell of you getting in a position to have a mortgage soon.

You'll need to save a deposit of about 20k probably, more depending where you are. At £100 a month that'll take you much longer than 6 years so don't worry about the poor credit rating!

CotswoldStrife · 27/06/2016 18:58

Will you pass a credit check to rent anywhere? You really need to sort out your debts first.

19lottie82 · 27/06/2016 22:28

You don't need to pass a credit check to rent.

The letting agency will just check publicly avaliable records to make sure you are not bankrupt or don't have any CCJs.

19lottie82 · 27/06/2016 22:29

OP head over to money saving expert, they have a forum called "debt free wannabe" where the posters can help you analyse your incomings / outgoings and work out where you're going wrong. But be warned they can be pretty brutal!

justmyview · 27/06/2016 22:44

Debts you owe may become time barred after 6 years. That means the creditor can't pursue you for payment. However, I think they can still report on your credit file that the debt was due / unpaid, which won't look good for you

Suggest you consult CAB or speak to your bank to see how much of a difficulty this might be

MargaretCavendish · 27/06/2016 23:48

Am I the only person who thinks that the OP is morally obligated to repay the debt? How is not paying it now any different to walking into a shop and shop-lifting £400 of stock?

Floralnomad · 27/06/2016 23:58

margaret , totally agree , but I assume ( hope) that if you never pay it off it is never removed from your credit file .

p33kab00 · 27/06/2016 23:59

Following with interest (pardon the pun!) I had no idea that debts could get written off that way! Shock

Anonymouses · 28/06/2016 00:08

I can't get an overdraft or anything but got a capital one card an aqua card. They all have low limits on. I can ask for the limits to stay low to reduce temptation to spend. It has really helped my credit. I put petrol on them then pay off at end of month. When I spend on credit card I move the money I spent from my current account into my online savings so it's there to pay the bill each month. It works.

louisagradgrind · 28/06/2016 00:43

That debt isn't insurmountable and it will soon be behind you. Don't let it cast a shadow and pollute your life.

Blondeshavemorefun · 28/06/2016 00:51

If you have debts of £1500 then contact the people and start a payment plan

Why should you not pay anything for another 2yrs and maybe have it written off

6yrs of ignoring a debt doesn't mean it doesn't exists aka never happened

Agree that's wrong !!!

Pay it off and start to save

You are still young and can save and get a mortgage at 30 +

BengalCatMum · 28/06/2016 04:09

This reply has been deleted

Message withdrawn at poster's request.