Mr M asked: I am trying to build my credit score but feel I am getting nowhere. I had 2 accounts in default which I paid about 1 year ago. My bills are paid on time. I have a Capital One credit card with a £200 limit. I always get £50 worth of petrol on the last Friday of every month and pay it manually a few days later. But I got an email from Credit Karma saying "When your last report came … [Read more...]
A reader asks ...
Readers have asked a huge variety of questions in the comments below Debt Camel articles. From credit ratings and mortgages to payday loan refunds and IVAs...
Some of them needed such long replies that I have turned them into the articles that are gathered here.
Bonuses & pay rises – what happens if you are in an IVA
A reader asked about a friend who is looking at an Individual Voluntary Arrangement (IVA): Mr X is 23 and owes just over 10k on various credit cards and loans. He earns £20k and hopes to get a £10k bonus this year. The IVA firm says the bonus doesn’t matter as it's not guaranteed. But won't the IVA take half of it? Would it be better if he got a job with a larger basic salary and no bonus, or … [Read more...]
What to do if Full & Final settlement offer is rejected?
A reader asked what she should do as her reasonable Full & Final settlement offer had been rejected. It's going to seem obvious, but the creditor rejected the offer because it didn't seem reasonable to them. You may think "I paid off the amount I borrowed ages ago, their interest is too high" or "They probably bought this debt for pennies, so they should be happy to accept 20%" but … [Read more...]
Save a house deposit or pay off debt?
A reader asked: "A friend said not to pay my defaulted debts off but save money towards a deposit for a mortgage - is this a good idea?" It's often unwise to rely on friends for debt advice... They may be guessing, their situation may have been quite different from yours, or they may be assuming what happened to them years ago is still useful today. And in this case, the friend may know … [Read more...]
Pregnant and can’t afford your IVA?
Abby is pregnant and worried she won't be able to afford the monthly IVA payments: My IVA was set up at the start of 2020. There are four debts in it, totalling £13,000. All the debts date from a previous relationship, my new partner doesn't have a debt problem. My IVA payments are £90 a month. I've managed so far, but I now need to buy things for the baby - cot, buggy etc. We are renting and … [Read more...]
“Improving my credit score – be added to my partner’s card?”
A reader asked: I have fairly recently got an Aqua card with a limit of £1,900. Credit Karma suggests this is low and a higher limit (with low utilisation) reflects well with lenders. I’ve only just had a credit limit with Aqua so can't get another one soon. But I could be added as a secondary cardholder on my partner’s credit card. This is her idea – she has a limit of almost £10k. She never … [Read more...]
Worried about starting a DMP? Answers to common questions.
A reader said she was scared about starting a Debt Management Plan (DMP). Her worries were that her husband's credit rating would be affected and that she would get lots of phone calls from creditors. A DMP is supposed to help with your debt problems, not increase them, so I thought it would be useful to look at the common concerns people have before they start DMPs. DMPs are good debt options … [Read more...]
I’m in a DMP – can I get a mortgage?
A reader asked about applying for a mortgage when she is in a Debt Management Plan (DMP): "I have been in a DMP for 8 years and still have 6 to go as I still owe £16,000. With hindsight, I should have gone bankrupt! My parents will give us a 20% deposit in 2021, but they don't know about my debts so I can't use their money to end the DMP. Will I be able to get a mortgage?" I've written before … [Read more...]
Will you get a Bankruptcy Restriction Order (BRO)? Does it matter?
Here are some recent questions from people worried about going bankrupt and possible Bankruptcy Restriction Orders (BROs): I gambled a lot but stopped over a year ago. I want to apply for bankruptcy, but will I get a bankruptcy restrictions order? I have credit card debts which I can't pay as I have had to stop work because of a disability. I went bankrupt in 2003 and had a DRO in 2015. Will I … [Read more...]
Coronavirus – 4 steps to take if you lose your job
A reader asks: Help! I have just been made redundant and I don't know how I am going manage, especially as we have debts. I'm only getting a few weeks redundancy pay. What should I do? A lot of firms are closing or making some staff redundant because of Coronavirus. If your firm has just closed suddenly, you may be worried about getting the pay for the weeks you have already worked, the pay … [Read more...]
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