Advised to take out a high interest credit card!

[penny.l]

Hi - I've very recently paid off my IVA and am waiting for my completion letter (due any day). I've just spoken to my IP who has advised me to take out a high interest credit card and spend £5 a month on it each month and pay it straight back in order to get my credit rating back up. I actually have 2 defaults still on my account from when my IVA was started so I am not sure I can do this anyway but I am slightly concerned that this is a bad and potentially very risky plan anyway...

I actually have a contract mobile phone that has been going throughout my IVA, which is paid on time so will this not help my credit rating anyway?

[Viki.W]

Hmm, not sure whether that's good advice or not penny. I know that I DO NOT want a credit card EVER again, you're probably the same. I can't see that it would repair your credit rating any quicker. Maybe I'm wrong, I'm sure someone in the know will help you out. X (personally though......NOOOOOOO!)

[Jan01]

Penny

Of course I don't know you but that advice could be like telling an alcoholic that a sip of alcohol won't hurt. Please don't think I suggesting you would spend recklessly but for some people that could be a big temptation to get credit again. I too have had a contract phone which I have paid each month with out fail and I would hope this would go some way to restore my credit rating.

Jan

[kallis3]

I definitely wouldn't do that. Once you have another one, the temptation is back again.

[penny.l]

Well exactly... I am fearful of credit cards to be honest, hate the things but eventually I do want to buy a house and not be stung by ridiculous rates. I'm sure there must be an easier way.

[TheMatrix]

Yes there is a easier way, wipe out all the defaults and the IVA record on your credit file, then apply for the mortgage.

If your in a contract with a mobile phone company you will find that they post details to the CRA's which will show regular payments being made anyway.

[chardonnay]

Hi Penny,
I'm with the others on this - also do you have a car that you're paying for - that would show regular payments and other things might help:
Being up to date with council tax, utility bills, not being overdrawn.
I think I can see what the IP Means, but if you end up having a bad month or something like that the temptation will be there to use the card.
It's your decision, but having gone without for the length of your IVA can you wait a bit longer before getting the mortgage?
Here's wishing you all the best,
Hugs,
Chardonnay

[kallis3]

Trouble is, utility bills, council tax and stuff like that don't show on your credit record, at least they didn't on mine. It was only normal credit stuff like cards and loans.

[MelanieGiles]

There is only one real way to get your credit rating restored and that is to wait for the six years to pass from the date of your creditors meeting at which time your record can be cleared. Your IP may have a point that the responsible use of a credit card can tend to show creditworthiness, but personally I would advise clients not to jump straight into things like this as the tempation to spend could be concerning.

[TheMatrix]

Cards, loans and mobile phone contracts appear on the credit files.

Defaults will be on there for 6 years from the date the default was registered so if they registered the default after the creditors meeting it would be in your interest to get this date amended back to the date of the creditors meeting.

CRA's have a responsibility to ensure the data is correct both under the data protection act and the consumer credit act. I'd get hold of a booklet called 'No Credit' which will give you some good advise on correcting incorrect information in your credit file.

Power to the people!

[plasticdaft]

I think after paying into an IVA people are surely going to act more responsibly with regards to getting a credit card. I hope to hell I have learned my lesson!!!

I think its a good idea to show a pattern of reformed behaviour,but it has to be used as a tool and not as a method to get back into old habits.

[kallis3]

I hope that by the time I have finished my IVA, I will be so used to using cash all the while that I won't even think about a credit card.

I never want to be in this position again, and if I have credit, I am afraid that I will.

[Maz]

Hi there

Great that you have now paid off your debt but I would think twice about getting another credit card, well for a while anyway. Like Jan said in it's a bit like the alcoholic syndrome. The temptation could be too much to spend more with it. I know I could never do it. There are other things on your credit file that would could put you in good credit worthiness like your phone contract, utility bills etc.

Investigate this first as getting into credit again can be very risky, as we all know.

Maz

[kallis3]

Maz, unfortunatly, your utility bills aren't on your credit file. Just mobile phone contracts, credit cards and loans and your bank details.

[Dee]

Hi

You could look at upgrading your account and possibly having a cheque guarantee card and cheque book as this could better your credit rating. I think sometimes people looking at these things like to see that you can manage credit, thats why its sometimes difficult to get credit when you have never had it before because they have no evidence that you can manage it.

Dee