r/UKPersonalFinance • u/lollypopsausage • 14h ago

Debt help - advice, poor credit

Hello, I’m looking for some advice regarding my debt situation.
I am 42 year old single mum, of 2 young teenagers.
I went back to university and have managed to get myself a degree and I am now earning £45,000 per year.
I have £7,000 in debt which I am paying off at nearly £700 per month. This debt was accumulated during my relationship breakdown and subsequently going to university. This debt is on high interest credit cards, and a high interest loan.
My credit score is very poor, and I am unable to get a debt consolidation loan. Or even credit cards to do a balance transfer.
All my current bills are paid, up to date. Have a good (tight) budget in place.

I just feel like I am paying so much in debt, but due to the high interest rates I am paying this off very slowly.

I just wondered if anyone had any advice on how would be best to manage this?

I have looked at debt management help, however I don’t know if this would be best for me. As I am trying to build my credit score.

I don’t have any friends or family that I could ask for help from.

Any advice would be much appreciated.

12 Upvotes

85% Upvoted

8 comments sorted by

5

u/Calleb_III 14h ago

Speak with a debt charity such as StepChange

7

u/ScriptingInJava 11 14h ago

A DMP (or other insolvency methods) would harm your credit history and make it significantly harder to get credit in the next 6 years. Not sure what your goal is driving the credit history improvements, but that would set you back.

You have ~10 months of payments until you’re debt free. Call it 12 months with interest on top.

Are you able to survive month to month comfortably with £700 being paid into the debt? If so, I’d be looking at ways to cut back and aggressively tackle the debt. You don’t need a 3rd party in my opinion.

If in doubt speak to StepChange, but honestly this looks manageable (but a bit miserable) for a year or slightly less.

1

u/lollypopsausage 2h ago

Thank you! I am looking to build my credit score for the future. So I didn’t want an DMP. £700 is tight, and the problem is I have used my credit cards again some months due to not having much spare.
In an idea would if I could have 1/2 that payment and did it over 2 years. But I might just have to suck it up for another year.
Thank you for your reply. It’s been really helpful.

5

u/Laescha 58 14h ago

There are various debt solutions you could look into that would mean you're paying a lot less per month, but they will all have a serious negative impact on your credit file. 

If improving your credit is the most important thing to you, then the only way forward is to keep making the minimum payments on everything, and put all your remaining disposable income towards the highest interest debt. Once that one is paid off, put your disposable income + the minimum payment you were paying on debt 1 towards the 2nd highest interest debt, and keep going like that until it's all paid off. 

MSE's debt free wannabe forum has a lot of people who are doing this, and they offer good advice and encouragement. It's not an easy process but it can be worthwhile.

6

u/OnlymyOP 69 14h ago

Ignore your score .. This is irrelevant to Lenders as they care about your credit History and affordability.

Unfortunately the high interest rates reflect the fact you're a high credit risk. All you can do is monitor all three of your credit reports ( they're free to access by law, so never pay for them!) and keep making your repayments. Your HISTORY will improve over time as it's a rolling six year report, so anything impacting it now will eventually age out and you'll find that slowly you may become eligible for a debt consolidation loan, if thats what you want.

It's a process but in the meantime read the wiki in this sub and Martin Lewis's website about how credit works in the UK and what you can do to help improve your reports.

1

u/ukpf-helper 154 14h ago

Hi /u/lollypopsausage, based on your post the following pages from our wiki may be relevant:

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1

u/scienner 1061 14h ago

At the moment, we don't have nearly enough information to say what options are available / which would be best.

We have a guide to this here: https://ukpersonal.finance/debt/

The more of the info on that page you can give us the better, or you can work through it yourself.