Debt/income expenditure form

[dudedj]

Hi. Im new here and looking for some help.

A bit of background info:

I was in debt for a good few years starting about 8 years ago. Eventually cleared it up via a DMP 3 ish years ago. My credit score was destroyed then and still hasnt recovered but is very slowly creeping up.

Now ive basically got myself in a bit of debt again by being an idiot (of course).

I have a logbook loan with about 1.1k on it and 17 months to go, a 118 money loan which has 2k left and 23 months, 3 payday loans totalling about 1.5k, and 1k on my barclaycard.

I have been making payments on time but it has been a case of struggling/maxing out my 4 sunny loans to get by. Have just emailed 2 of my payday lenders (the 3rd isnt too much of an issue hopefully) and they both want to do an income and expenditure, but warn that it could affect my credit score.

My plan is to get the payday loans on a payment plan mainly to freeze interest and so i can keep up with the big loan payments more easily without the payday loans eating all my cash, then when i can get into more of a routine i would look to clear the PDLs asap then work on the other 2, especially the logbook loan, as its a smaller loan over a smaller term yet has a higher monthly payment than the 118.

Without living in poverty I could comfortably spare (if being fairly sensible) £400 or so a month, but the big 2 loans total about £330 a month. Although if i can pay them on time and chip away at the payday loans/pay more when i can, then im hoping they will be cleared in a few months and then i can pay extra towards the big 2. Im not too worried about the credit card. Happy to make minimum payments on that for now.

My original question was going to be what effect would a payment plan have on my credit score? Sunny dont really mention it but wagedayadvance say it may affect it, etc, although as im not overdue or anything at the moment would i be ok?

I just want my credit score to improve which is why despite being a fool and getting into debt again this time round ive always made payments, so not a ton of defaults any more as i think theyve all gone, but big balances on my report and lots of searches means its still 1/5 and 530 out of 999 or something like that.

So just to clarify from my ramblings, id like to know if a payment plan will effect my credit score, and also if this is the best way of dealing with my debts? As its been getting me quite down lately and whilst im making the best of a bad situation (although i guess its not that bad debt wise) its time to get it sorted as soon as possible.

Id like to pre thankyou all for the help.

[nightwatch]

Re: Debt/income expenditure form

I think that any payment plan will be marked on your Credit file, But I could be wrong.

i have flagged your post up to see if anyone can help.
good luck NW

[Never-In-Doubt]

Re: Debt/income expenditure form

So just to clarify from my ramblings, id like to know if a payment plan will effect my credit score, and also if this is the best way of dealing with my debts? As its been getting me quite down lately and whilst im making the best of a bad situation (although i guess its not that bad debt wise) its time to get it sorted as soon as possible.

Yes, a DMP or any plan where you have pre-agreed with the lender to repay less than the due amount would result in an AP marker being added to that account on your credit report which in essence shows other lenders who may search you, that you're not the best risk.

Regardless that you're trying to clear the debts by being in a payment plan, it will affect you because the fact is you're not paying the set agreed contracted amount. That said, if you're not defaulted then it's not as bad - but sometimes it's easier to get defaulted and get it over with as after 6 years, the default entry goes.

So without more info of what is on your file we can't really give too much in the way of what if's.....

I have around 10 current defaults and have a similar score - but still get accepted for bank accounts (I have like 20+ bank accounts at present lol) and also get approved for certain credit like Marbles / Aqua / Cap1 / Barclaycard etc (i.e. sub-prime ish cards).

Cheers

[dudedj]

Re: Debt/income expenditure form

Well wageday have given me 30 days and frozen my account to setup a payment plan. Will payoff my weekly sunny payment tomorrow then it gives me another week to decide if i want to go on a payment plan for that also, as it is bigger than the wageday, which in 30 days i might be able to pay.

I guess my credit score is already knackered but dont really want any marks for 6 years. Or will the AP not effect it for that long?

[Susie]

Re: Debt/income expenditure form

The arrangement to pay will last for 6 years from when the last payment is made, whereas with a default the whole account will disappear after 6 years from the default date. Since a lot of companies will default you at some point in the arrangement to pay anyway, its normally thought to be better if you get it over and done with early so that the 6 years starts as quickly as possible.

[Never-In-Doubt]

Re: Debt/income expenditure form

As above - however to add - in an arrangement, it will show 12 years not just 6. So it'll show the previous 6 years history on a running basis so in layman, let's say you had an AP for 6 years - as CRA data is stored for 6 years; this means if your arrangement ended in 2011 there would still be the AP marker on view, in 2017. However if you just got defaulted back in 2005 and didn't bother with the arrangement, the whole entry would be gone in 2011 regardless if paid or not.

Make sense?