Bad Credit

THE NATIONAL DEBT LINE: 0645 500 511 CONSUMER CREDIT COUNSELLING SERVICE: 0800 138 1111 MONEY ADVICE ASSOCIATION: 0207 489 1800 BANKRUPTCY INFORMATION: 01482 658701 The CCCS can send self-help packs, arrange counselling sessions over the phone, or face-to-face in certain areas, and negotiate with creditors on your behalf. One of these organisations should be able to help you with a strategy on the best way to move forward and solve the problem. Whatever approach you take to tackle your debt problem, the most important and most effective thing you can do is to take action straight away. The longer you wait before taking control, the worse the problem will become. Check our helpful tips page for more information. Next: Credit score information news mortgages news Mortgages in euros expensive for UK borrowers - Mon, 21 Apr 2008 Government failing to help first time buyers - Mon, 21 Apr 2008 Bank of England to help mortgage lenders - Mon, 21 Apr 2008 Dealing with Creditors Communication is the key to successful negotiations with creditors. Do not ignore letters, and bury your head in the sand. The problem will not go away. Mortgage Information - Dealing with Creditors Mortgage Quote Line 0845 108 0505 Financial Services Mortgages Mortgage Information Dealing With Creditors Dealing With Creditors Communication is the key to successful negotiations with creditors. Do not ignore letters, and bury your head in the sand. The problem will not go away. Respond to them promptly by letter or by telephone. If you promise to contact someone by a certain date, make sure you keep your promise and contact him or her even if only to tell him or her when you are going to make a payment. As long as you keep them informed of the situation they will understand. Avoid Confrontation As a debtor your objective is to persuade someone to be sympathetic to your circumstances. It never pays to get angry with anyone, even when you feel justified in doing so. Always remain polite and courteous even in the face of being treated rudely. If someone is acting negatively with you and you react negatively, this will make the situation worse and not help your cause. It is worth remembering that the people you are speaking to deal with debt problems every day and are trained to handle these situations sensitively. If they are rude to you, ask to speak to a manager or supervisor and explain your situation to them. It may not feel like it but these people are there to help you so let them do just that by keeping calm and in control. If you do this you are far more likely to get a positive outcome. Put Everything In Writing Always keep a log of all paper work. This starts with your records such as invoices, credit card statements etc. Every telephone call, letter written or received and offers made. Always make a note of the date and time and to whom you have spoken to and always confirm all conversations and offers in writing. Be Realistic If you make an offer of repayment, always make sure that you can do what you have promised. Offer the maximum amount you can comfortably afford. Do not worry if this is only a very small amount, it is better than nothing. This shows your creditor that you are serious about clearing your debt. Ensure you complete your statement of means as accurately as possible, not forgetting expenses such as school uniform, child minding, TV licence and essential house hold bills etc. Do not over estimate your expenses, the majority of creditors are fair and they will expect realistic payments, most will try to help. Don't threaten creditors by saying you are going bankrupt Most creditors and their agents hear these types of threats every day and it will not help at all. You will be putting up a barrier that will hinder negotiations. Creditors are likely to become more aggravated and their standard reply is 'go ahead and file for bankruptcy'. There is a way of doing this indirectly in the context of explaining your adverse financial circumstances, with an inference that bankruptcy is a possible alternative in the event that the creditor does not accept your offer. Make your offer as brief and precise as possible Explain the reasons for your current financial difficulties and then come to the point and make an offer. Make the terms of the offer precise. Do not leave things open and do not say you think you may be able to pay more in a couple of months. Set a figure and stick to it until you are sure you can afford to pay more. If you get into trouble If you get into trouble paying the negotiated amount and you can't adhere to the arrangement, contact the creditor immediately. Try to send a portion of the funds you promised with a proposal to make up the balance, or renegotiate the entire proposal. Do not wait for the creditor to contact you after you have missed a deadline for payment, as this will just make things harder for you, and the creditor will be less sympathetic. Cover Yourself If you receive Court or official papers, cover yourself. Make sure you know how much time you have. This is usually set out on the Court or official papers. Consult with either a Citizens Advice Bureau, insolvency practitioner or solicitor regarding your rights, or the means to resolve the claim without going to Court. If you contact the creditors, or their agent, and start negotiating the claim, make sure the response to deadlines is postponed to a date that you can keep to. This postponement must then be confirmed in writing. Consumer credit act A UK Act of Parliament aimed at protecting the borrower in credit agreements, loans, and mortgages. The Act requires full written details of the true interest rate (i.e. annual percentage rate) to be quoted; a cooling-off period to be given, during which borrowers may change their minds and cancel agreements; and all agreements to be in writing. The Act does not cover overdrafts. You will find information on this page to help you find out more about your credit score and credit rating and how you can improve it. Mortgages reside under the Consumer Credit Act 1974, where if you ask for a written quotation you must be given one, which sets out the main terms of the mortgage loan. You will find information on this page to help you find out more about your credit score and credit rating and how you can improve it. Your score will be very influential in determining your ability to obtain any further credit. Whether for debt consolidation or just a loan and it is important you know how to improve and maintain your credit score in order to avoid the need for debt management. What is a credit score This is how lenders calculate whether they will grant a loan or credit. A score is a snapshot of your credit risk picture at a particular point in time. The higher the score, the lower the risk to lender. How are they calculated Every score is individual and calculated using a mathematical formula that evaluates all types of information on your credit report, compared to information patterns in millions of past credit files. The score can then identify your level of future credit risk. What is the most important factor to consider Most credit score and credit rating agencies use five main factors to determine your credit score. Listed in priority order these are: - Payment History, - Amount owed, - Length of credit history, - New credit, - Types of credit in use. These will vary between credit rating agencies but the essentials will remain the same. Why do lenders use scores Scores provide an extremely reliable and valuable guide to future risk based solely on credit report data. The higher your score the lower the risk to lenders when extending new credit to a consumer. Debt Consolidation Loans often require a good credit score, so do not wait till you have missed lots of payments to ask for help. The reason for this is that banks are far less keen to lend money to repay other people's debts than they are for a tangible item such as a car or household appliances. Does everyone have a credit score Yes, any one who has had credit will have a credit file. For a score to be calculated on your credit report, the report must contain at least one account that has been active for six months or longer. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough recent information, in your report to compute an accurate score. Your score also will not be calculated if there is a fraud statement on your credit file or if all trade lines are disputed. How often does the score change Your credit file is continually updated with new information from your creditors and companies you have applied for credit. How can I improve Credit Score and Credit Rating Online Generally, people with high scores consistently: - Pay bills on time. - Keep balances low on credit cards and other revolving credit products. - Do not have too many accounts open at one time. Receive a good, regular income. How often does the score change Your credit file is continually updated with new information from your creditors and companies you have applied for credit. Next: Credit report Contact and send a cheque for 2.00 to each of the following: Experian Ltd Website: www.uk.experian.com/consumer Telephone: 0870 241 6212 Post: Consumer Service Help Centre Experian Ltd PO BOX 8000 Nottingham NG1 5GX Equifax PLC Website: www.equifax.co.uk Telephone: 0870 010 0583 Post: Credit File Advice Centre PO BOX 3001 Glasgow G81 2DT Next: Am I protected A CAT mortgage is one that meets a number of government defined standards relating to 'C'harges, 'A'ccess and 'T'erms. A CAT mortgage is one that meets a number of government defined standards relating to 'C'harges, 'A'ccess and 'T'erms. According to the Treasury, the objective of CAT standards is to 'prevent confusing marketing and hidden charges'. The Government is seeking to set out basic and transparent conditions for mortgage products. CAT standards don't apply to all mortgages. They are voluntary, so mortgage lenders don't have to use them yet. The literature or other information you get about a particular mortgage will say whether it's a CAT-standard or not. If you take out a CAT-standard mortgage, you can be confident that it has no nasty surprises hidden in the small print and that the terms won't suddenly change for the worse. Mortgages that are not CAT-standard are not necessarily bad buys. They may offer features that will interest some people, such as a highly attractive interest rate, but are accompanied by charges or penalties that do not meet the CAT standard. Below is a summary of the CAT Mortgage Standards relating to variable, fixed, discount, cash back and capped rate mortgages. Remember - the CAT standard:

• This does not mean the government guarantees the mortgage,
• This does not mean the government recommends or endorses the mortgage,
• This does not mean the mortgage is necessarily suitable for you,
• This does not mean the mortgage is the best deal available.

• There must be no arrangement fee.
• The interest rate may be no more than 2 per cent above the Bank of England base rate.
• When the base rate falls, your mortgage payments must be adjusted within one calendar month.
• You must be able to pay off part or all of the mortgage at any time without penalty.

• Interest must be calculated daily.
• Every regular payment and overpayment you make must be credited immediately.
• You may not be charged separately for a mortgage indemnity guarantee.
• All fees must be disclosed in cash up front before you take out the loan.
• A broker arranging a CAT-standard mortgage for you may not charge a fee.

• The maximum booking fee arrangement fee is 150.00.
• The maximum redemption charge is 1 per cent of the amount you owe for each year of the fixed period, reducing monthly.
• There must be no redemption charge once the fixed-rate or capped period has come to an end.
• There must be no redemption charge if you stay with the same mortgage lender when you move home.

• If there is a minimum amount you must borrow, this must be no more than 10, 000
• Any customer may apply for the mortgage.
• The lender's normal lending criteria must apply - there can be no special selection rules.
• Provided the lender is happy to lend against the new property, you can continue with your CAT-standard mortgage when you move home.
• If you make regular payments, you can choose which day of the month to pay them.
• You can make early repayments at any time.

• All advertising and paperwork must be straightforward, clear and fair.
• You do not have to buy any other product to get a CAT-standard mortgage.
• You must be given at least six months' notice if your lender can no longer offer you a mortgage on CAT-standard terms.
• If you fall into arrears, you should pay interest only on the outstanding debt at the normal rate.

A secured homeowner loan is subject to The Consumer Credit Act 1974. The Act contains strict regulations about how money is lent and covers loans up to a value of 5, 000. A secured homeowner loan is subject to The Consumer Credit Act 1974. The Act contains strict regulations about how money is lent and covers loans up to a value of 5, 000. Loans for sums greater than 5, 000 are unregulated. When taking out a secured loan monebaggasse