Helping daughter get a good credit rating.

BeSnugEagle · 2024-10-18T21:33:42+00:00

My DD is now divorced after a 20 year marriage with two teenagers. During this time, herself and son-in-law built up debts, always living beyond their means. They have split the proceeds from the sale of the house and she has £120000. She is temporarily living with us and children with their father until she rents a flat. She has not worked for a year due to depression over her divorce. When applying for a flat, she thought being able to put down a year's rent would enable her a chance for a property, but no letting agents will touch her due to no job and awful credit rating. After a family discussion today, we have come to the decision she should stay with us, she has today secured a job and work on improving her credit rating. Her children are 40 miles away and she is missing them like mad but we can't find any other solution. Any advice please on ways to do this..As she is living with us, she has no bills to pay so can't see how she can prove this to a credit agency.

NewName24 · 18/10/2024 23:31

Does she have a credit card ?

She can put 'spending' on that and pay it off each month.

Presumably she has a phone, so that is one bill.

I suspect the difficulty getting a flat would be as she didn't have a job more than, or at least as much as, not having a credit record.

DeliciousApples · 18/10/2024 23:57

Can she not buy a nice flat or house for £120k ?

cannynotsay · 19/10/2024 00:03

Where are her kids, how old are they

redtrain123 · 19/10/2024 00:13

Get a credit card, and use it for weekly shop, petrol etc, but pay it off each month.

Could she pay for shopping and you pay her back?

PaminaMozart · 19/10/2024 00:18

If she does not have a credit card, she should apply for a secured card. It's absolutely vital that she only uses it for small amounts and pays off the full balance each month and on time.

Could transfer one of your utility bills to her name? Though they'd probably want a security deposit from her.

Also look at Moneysavingexpert, including the forum.

Bjorkdidit · 19/10/2024 05:41

Have the debts been paid off? Is her income sufficient to live on her own? Who was bad with money? Him, her or both of them?

Would the £120k plus what she can save while living with you buy a suitable home outright or with a small mortgage for her and her DC? There used to be adverse credit mortgages that were hardly any more expensive than standard ones so if buying is a possibility then this is something she should talk to a broker about.

Her problem is that bad debt remains on her credit file for 6 years so it's going to be a while before she has a perfect credit rating although as the debts get older ie in a year or two, they'll become less relevant. If she has to rent, are you able to be a guarantor? Or is her and DC living with you for a while longer an option?

Original poster

BeSnugEagle · 19/10/2024 06:57

Debt so bad, contract phone taken away.

OP posts:

wiesowarum · 19/10/2024 07:02

She needs to build her own credit rating, with no 'assistance' - credit rating should reveal if someone is responsible with credit. If it's low she'll need to rebuild it back up gradually.
The advice is normally to start with something like a phone contract, a credit card with a low limit etc.

Redleavescatfiend · 19/10/2024 07:04

DeliciousApples · 18/10/2024 23:57

Can she not buy a nice flat or house for £120k ?

Hahaha

Thankyouforthisthread · 19/10/2024 07:04

I’d concentrate on finding someone who will rent to her. If she can be reunited with her children, surely her mental health will improve? I say this as a landlord who recently rented a property to a woman in similar circumstances to your own daughter. She paid a year’s rent up front whilst she gets back on her feet and can then get a job. Obviously I did other checks other than a credit check and my solicitor did the rest. My property had been on the market for about 12weeks and unsold and she rang the estate agent to ask if I’d rent it to her which I was happy to as the market wasn’t buoyant.

Original poster

BeSnugEagle · 19/10/2024 07:05

Thanks everyone for replies. Not sure how to answer individually. They were both as bad I am finding out.
She needs to live Essex/London borders where she is at college and it is Impossible to buy a place for the money she has.
I will advise her to try for a high rate credit card and ensure she pays it off each month.
Aa good idea about the utility bill, this is what she needs, but not sure if this an redone as wearethe homeowners.
Honestly, we have been waiting years for this to happen and had many arguments and sleepless nights , but I have now got to stop saying "I told you so".
We only live in a small place ourselves and it is quite difficult, but can't see any other answer and it seems like she will have to live with us for quite a few years.

OP posts:

Original poster

BeSnugEagle · 19/10/2024 07:10

Thankyouforthisthread · 19/10/2024 07:04

I’d concentrate on finding someone who will rent to her. If she can be reunited with her children, surely her mental health will improve? I say this as a landlord who recently rented a property to a woman in similar circumstances to your own daughter. She paid a year’s rent up front whilst she gets back on her feet and can then get a job. Obviously I did other checks other than a credit check and my solicitor did the rest. My property had been on the market for about 12weeks and unsold and she rang the estate agent to ask if I’d rent it to her which I was happy to as the market wasn’t buoyant.

Edited

If only she could find a landlord like you to give her a chance.
She did think a years rent would give her a start and the year after she would have a job reference.

OP posts:

Original poster

BeSnugEagle · 19/10/2024 07:11

Redleavescatfiend · 19/10/2024 07:04

Hahaha

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Not near London

OP posts:

Mrsttcno1 · 19/10/2024 07:13

What are we talking credit wise OP?

Missed payments? Defaults? CCJ? Arrangement to pay?

As my advice would be different depending on the situation re. improving credit score :)

Changingplace · 19/10/2024 07:14

She needs to live Essex/London borders where she is at college and it is Impossible to buy a place for the money she has.

Isn't it enough for a deposit though? Once she’s got an income and her credit rating is better why is she only thinking of renting?

With a lump sum like that she should be thinking of trying to buy somewhere rather than spending it on rent, or what will she do in the future? If she doesn’t use that money as a deposit when will she have the opportunity again?

Changingplace · 19/10/2024 07:16

BeSnugEagle · 19/10/2024 07:10

If only she could find a landlord like you to give her a chance.
She did think a years rent would give her a start and the year after she would have a job reference.

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I think not having an income will be more of an issue, after she starts working she should try again.

Thankyouforthisthread · 19/10/2024 07:18

BeSnugEagle · 19/10/2024 07:10

If only she could find a landlord like you to give her a chance.
She did think a years rent would give her a start and the year after she would have a job reference.

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We are out there. You need to get creative like my tenant did. And I’m in Essex. Try the local FB pages? It’s where a lot of non-letting agency LL’s and tenants find each other.

She needs to get back into work also. Even if it is just PT. Coming up to Xmas there will be more temp opportunities. Once she’s got back into the swing of things, everything else will follow. I do wish you well.

WithnailOnTour · 19/10/2024 07:24

No such thing in the UK as a credit rating:

ukpersonal.finance/credit-ratings/

noscoobydoodle · 19/10/2024 07:35

I would 100, percent recommend she speaks to Step change debt charity. It's free and believe me they have seen it all (and more) before. I work with them (not for them) in a professional capacity - they are highly regarded by industry, regulators and government and very knowledgeable. I also have personal experience with my mother in law who has spent her entire adult life in debt, dodging bailiffs and court, not being able to even get a contract phone etc. They have helped her get on her feet after ill health gave her a wake up call to get herself sorted. Your daughter is vulnerable because of her circumstances and lenders have an obligation to support vulnerable customers.

AgreeableDragon · 19/10/2024 07:48

Start at the beginning. Get a credit report from each of the three credit scoring companies used in the UK and check the entries are correct. Then work on improving in the areas such as making regular payments. A debt management plan would help, but can also negatively affect credit.
Get her on the electoral register, that's a positive thing in the land of credit scores.
It's a very long process, and her scores won't change quickly. But they can be improved over time.
www.moneysavingexpert.com/loans/check-free-credit-report/#:~:text=There%20are%20three%20credit%20agencies,they%20all%20have%20an%20impact.

Original poster

BeSnugEagle · 19/10/2024 09:32

Thankyouforthisthread · 19/10/2024 07:18

We are out there. You need to get creative like my tenant did. And I’m in Essex. Try the local FB pages? It’s where a lot of non-letting agency LL’s and tenants find each other.

She needs to get back into work also. Even if it is just PT. Coming up to Xmas there will be more temp opportunities. Once she’s got back into the swing of things, everything else will follow. I do wish you well.

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Thank you so much. The only good that has come of this is I am hoping the shock of reality has hit home.
Applied for jobs yesterday and as you said Christmas jobs will be available.
Believe it or not she is an intelligent 44 year old and until her husband left her six years ago had always held down goid jobs. This is why they were able to live the life they had when he was there. Depression set in, but the spending didn't.

OP posts:

Original poster

BeSnugEagle · 19/10/2024 20:13

noscoobydoodle · 19/10/2024 07:35

I would 100, percent recommend she speaks to Step change debt charity. It's free and believe me they have seen it all (and more) before. I work with them (not for them) in a professional capacity - they are highly regarded by industry, regulators and government and very knowledgeable. I also have personal experience with my mother in law who has spent her entire adult life in debt, dodging bailiffs and court, not being able to even get a contract phone etc. They have helped her get on her feet after ill health gave her a wake up call to get herself sorted. Your daughter is vulnerable because of her circumstances and lenders have an obligation to support vulnerable customers.

Thank you so much for your helpful and compassionate reply. I will sit with her tonight to discuss all of this.
She has now paid all her debtors back, from the house proceeds, and is now debt free so a fresh start tomorrow.

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Original poster

BeSnugEagle · 19/10/2024 20:32

Changingplace · 19/10/2024 07:14

She needs to live Essex/London borders where she is at college and it is Impossible to buy a place for the money she has.

Isn't it enough for a deposit though? Once she’s got an income and her credit rating is better why is she only thinking of renting?

With a lump sum like that she should be thinking of trying to buy somewhere rather than spending it on rent, or what will she do in the future? If she doesn’t use that money as a deposit when will she have the opportunity again?

Completely agree with you regarding a mortgage, but to live where her daughter is at college, she would need to borrow at least £250000 to put with her £100000 and she would have to pay this until she is 70.
Also do you think anyone would give her a mortgage with such bad credit rating. If she lives with us until her rating improves, I am thinking about 3 years, she would be even older.

OP posts:

PaminaMozart · 19/10/2024 21:04

I suggest your daughter seeks advice from CAB and also talk to a mortgage broker.

And also check out the Moneysavingexpert website and forum.