Cannot get approved for any credit at all despite good score and no ccjs etc, frustrating

[Iamsocold888]

I had a debt repayment plan almost a year ago as I had around £7000 debts, but I received a family inheritance and paid the vast majority of it off, so was only using the plan for around 2 months.
I have around £130 of loan debt but nothing else, no overdraft, no cards etc and I use a credit boosting app

I’m on the electoral register

Haven’t had any missed payments for quite a few months

However I cannot even get approved for klarna due to my credit history. I’m not trying to take out a card or a loan otherwise, I just want to split the cost of something on klarna.

Out of interest i searched my loan eligibility and I wasn’t eligible for anything. It’s frustrating as my credit score is ‘good’ on Experian now, used to be very poor a year ago.

I am on track and save money each month, next to no debt. I’m not sure why I am rejected for everything as it’s been 6 months since the debt management plan finished too, is it going to take years until I can access anything ?

Were you on a DMP

www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-management-plans/debt-management-plans-explained/credit-rating-impact-of-debt-management-plan/

If you want to split payments just save until you can actually afford whatever you want to buy.

Pay off the debt you already have before even considering more debt.

It's only been a few months, and paying debt off from family money rather than earnings doesn't show anyone that you can manage debt. Slow your expectations right down. It's actually helpful to stop you from getting over your head in debt again. Learn to manage finances within your income, then in a year or two ask your own bank for a credit card with a low balance; paying that off regularly will build back up your credit score by showing that you've learned how to manage debt.

Missed or late payments stay on your record for six years. You say you've not missed any for quite a few months - but lenders will be looking at at least the last year or two for evidence even if they're not worried about what happened five years ago.

It sounds like you were way over your head in debt and got bailed out by the inheritance. Lenders will need to see proof that you are now able to live within your means before they decide to take the risk of lending you money again.

The best thing you could do is get yourself one of those credit cards with a ridiculous APR and keep the debt low. Not borrowing anything doesn't help your credit score, you need to show you can be responsible and always pay back what you owe on time.

@MrsBobDylan

I can tell you from experience (my DRP very similar to yours) that it is 6 years from when you paid it off.

Don't mean to depress you but that includes getting a mortgage and can even stop you porting an existing mortgage to a new property.

The other bad news (and so didn't feel clear on any of this either until it was too late) is that if you are married, it also affects your spouse.

All round, very shit indeed.

Not true. Only effects your spouse if you have any joint accounts or finance etc. If you're not linked financially it will not effect your spouse. And I speak from 20+ years finance experience and being through this myself with an ex.

Yes @TotallySuper but most people are linked financially to their spouse, especially via a mortgage.

My dh is unable to apply for a mortgage even though it is not his DMP.

Some of these replies are helpful and some are not. I am ‘managing my money’ fine now thanks.
I will do my research and speak to a reputable adviser. Thanks for the majority of posts however there are some sneering ones who’ve never had any debt before, well you never know anybody’s circumstances so don’t be so quick to judge.

I am ‘managing my money’ fine now thanks.

But you're not because you still have debt and want to take out more credit. It doesn't matter that it's 'just' klarna.

Plenty of us have had debt then paid it off and learned from our mistakes, so avoided unnecessary debt in future.

It’ll be the missed payments. “Quite a few months” of paying on time doesn’t make you a good candidate in the eyes of lenders.

Clear your loan and then apply for a credit rebuilding card - not for the purpose of accessing credit, but to work on improving your credit score.

It won’t be six years. It will be six years before everything vanishes from your credit file, but you’ll be able to get credit long before then. Probably more like 12-18 months.

Ignore girlmom21s post. I know what you mean!

@Magicalwoodlands I know what she means too but I'm not sure why that means she should ignore my post. Getting into more debt when you have debt is silly. £130 is really easy to pay off if she can afford klarna payments.

I've been in the exact same position (paid all debt off with an inheritance) and it took 6 years for my account to be clear.

Did it take 6 years for you to be able to access any further credit ?

You need to look harder at your credit file.

Most debt repayment plans come with the agreement that you’ll accept a default on your file. That’ll take 6 years to drop off as will any missed or late payments. Your credit ‘score’ really means nothing tbh.

Keep on doing what you’re doing and you’ll be able to get some credit soon, but clearly it’s too soon at the moment. Don’t keep applying though as it doesn’t look good, even if the companies are only doing soft searches.

I’ve been there, I know how frustrating and sometimes upsetting it can be. It’ll pass.

@Iamsocold888 - even if you were fully on top of all your debt right now, you aren't living within your means if you need to borrow money. That money then has to be repaid with interest; that means that where now you earn X and spend X, your new world with the debt means you earn X but have to spend Y to service the debt before you have any money left over. Companies giving loans expect all the money back plus interest, all paid on time. Right now, you are not showing that you can look after money at all, you're running around trying to get more debt. Slow it down, live within your means, save a bit for random purchases and emergency needs. Then when you borrow money it should be for a useful purpose. The only sensible reasons to borrow money are car loan, mortgage or education; plus rarely to pay off an unexpected essential bill such as a new boiler. Paying off interest on some bit of plastic tat so you end up paying double is silly.

@Iamsocold888

Did it take 6 years for you to be able to access any further credit ?

No it doesn't take 6 years to access credit but at least 1 year from all debt account showing as closed. You haven't answered but have you actually paid off and closed ALL debt as yet? Focus on that first.

@Iamsocold888

Did it take 6 years for you to be able to access any further credit ?

@OP - Yes, unfortunately. I couldn't even get one of those credit cards with huge APR rates and I couldn't get a bank arranged overdraft for emergencies either. I paid off my debts in one chunk with my inheritance, having no idea of the consequences long term.

I didn't get accepted for Klarna but I did for Clearpay so can you try that? I've used it a while now and found it really helpful. Also, if you've had an amazon account for a couple of years then on some items they allow you to pay monthly over a 5 month period.

Hi OP. The black marks will stay on your credit file for 6-7 years but they won’t stop you getting credit for the whole six years. You are already one year down the line, it might not be a bad thing to not have credit for the next couple of years. If you have direct debits set up this will help build your credit score, things like phone contracts also count as credit if you have one of those. Also, on Klarna, I’m banned from using them over a £15 debt and have a very good credit score. I thought they took the money automatically and it was handed to a debt agency - it hasn’t affected me getting other credit, I just think they are strict. In hindsight it’s a good thing because Klarna is just another way to get in debt! As other users have said money saving expert is your best friend - whatever you do don’t apply to credit cards you won’t get accepted for, this will negatively affect your score.

OP if you download the ClearScore app they often have deals that you’re pre-approved for based on your score with them.

I’m a foreigner so had no record and couldn’t even get a credit report from Experian or any of the others. So was rejected from every card except for credit builder ones. A few months after I got clearscore I got quite a few offers

*except for ONE credit builder one. It was Vanquis

Perhaps klarna only take people with good credit history and you are better off with a credit building card.

However, just make sure everything is cleared off first and maybe wait another 6 months.

If any of the old cards are showing as open on your credit score instead of closed (even if they have told you closed and cancelled your card) transfer an extra couple of pounds. They will then keep reporting your account to the credit reference agencies monthly and will report as up to date that month. Hopefully your history will then look better in a year rather than wait 6 years.
At some point an account like this they’d send you a cheque for the credit and stop reporting, but you may get a bit of bump.

"I can tell you from experience (my DRP very similar to yours) that it is 6 years from when you paid it off."

Not true. Its from the date of default, the 6yrs doesn't just start when you've paid it off.

I was in a similar boat OP. Could never get any credit once split with partner. A CCJ, 2 defaults. I had to take a mortgage break etc due to being vulnerable at the time etc. I've had several years now of no missed payments and am now able to get credit. I'm very mindful about what I use credit for and keep to a minimum, as I plan to remortgage next year. Key for you will be to not miss payments. A credit builder card may help but you can't afford to miss those payments either...so be 100% sure and committed before taking one out.

With Klarna, for those who don’t realise, it isn’t just a form of credit but a form of managing buying online.

For example, if you want to buy a dress and you aren’t sure whether a 12 or 14 would be a better fit, you buy both and with Klarna can return the one that doesn’t fit as well without money leaving your account and being returned which can be a faff.

If we all lived within our means very few people would buy a house, by the way.

There's some poor and incorrect advice on here OP. I'd recommend you contact step change or another debt charity for decent advice. Or MSE forum as I mentioned previously. Good luck.