I have applied to all three banks for a CDL to help fund my masters in biomedical sciences. I dont think they will give one to me, because I have previously (within the last 3 years) had my account sent to debt agencies and I still owe about 2K. So my question is do any of you guys know whether or not I could get a personal loan (working p/t) and if im more likely to receive one compared to a CDL. Anyone know a bank or other business that might consider lending money to a student with bad credit rating?

I was in a similar situation to you. It took much time to sort out!

I needed a CDL but had two defaults (as a result of student debt from my first degree). I owed £2,000 to a bank, £500 as a loan for a computer, and another £500 for something else (credit card?). To get my CDL I paid back my loans and updated my details with checkmyfile.co.uk (they are brilliant!). It takes ages companies to update your details so checking on there makes it easier to chase them up! (Use the see your file monthly service). They had to mark my debts as satified. I then wrote a letter to my CDL bank saying that although I had a poor credit record in the past, I got into that situation through loosing my job (I did loose my job), and was unable to keep up my repayments. I think I put something in there also about taking my debts seriously and that I had paid back all my debts. (Some people don't and they make IVA's instead).

I applied to a bank that I only have a credit card with (most banks are so wary about debt now that for most people they will only cross lend ie sell you a product if you already have a product).

I also put in my letter about the jobs I was expecting to get afterwards plus the earnings. I printed off jobs off jobs.ac.uk with adverts for people with my area of masters and included them in the letter.

You wil find that it is almost impossible to get a loan with defaults. Almost every bank told me this. However, if you manage to pay off all your debts and show that you are a 'reformed character' or that your bad money management was for reasons beyond your control, but that you take debts seriously and have paid them back, you MIGHT get one. Plus if you include your expected earnings post masters this is good. Banks are companies and want a return on their money.

I got my career development loan with the first bank I asked. I already had a credit card with them. I pointed out also that I had kept up repayments with that (they profile your behaviour). I got less that I asked for. I didn't dare to apply to any where else as I knew how lucky I was to get what I got!

Every time you apply for credit this goes on your credit file. If you apply for credit more than I think three times in three months this looks bad. It looks like you are applying for credit because you are desperate and already have alot of debt.

Choose when and to whom you apply for credit wisely!

If you have a default and have already been turned down for credit three times and have outstanding debt, then you will certainly not get a personal loan.

In terms of late payments for any credit record you should have no more than...I can't remember if it's two or three late payments in the last twelve months. This will bring down your score.

You must also have lived at your last address for a fair amout of time, you must also be on the electoral roll.

You can get more advice from checkmyfile, moneysavingexpert.com, nationaldebtline, and Alvin Hall books.

Good luck!

P.S. A masters cost an aweful lot more than the max CDL! To do a masters you realistically need £140 a week to live on. By the time you have paid your fees out of your loan there won't be alot left! You might need the uni access fund also. Apply as soon as you start masters. Also some masters are so demanding eg law it is very difficult and unwise to work without jeopardising your grades, so doing a full time masters and for money heaviliy not advised.

On another forum someone told me her friend didn't get a CDL because she has bad credit history.

thanks for the reply hattie. Im still going to apply for 1 CDL and see what happens, and since im working perhaps I can get a private loan from one of these dodgy online companies!

ps I cant believe the UK is one of the richest countries in the world

If someone has money on a credit card that is normal debt. If things have got so bad that you have defaulted and your debts have been passed onto debt collection agencies this debt is classed as 'bad debt. This is because the bank have formally demanded it back through legal channels and you have not paid it. If say you have a credit card for £500 which you have maxed out on and a bad debt of £2,000. Your credit rating with checkmyfile will say that you are utilising 500% of all available credit! A company will think to itself that you are 'overindebted' and can't afford to take on any more debt. They will be think that if you can't even afford to pay back that that 'bad' debt how can they guarantee you will pay them?

Now if you have an authorised overdraft of £2000 and a credit card of £500 and you maxed out. Your credit rating would say that you were utilising 100% of all available credit. It is unlikely but still possible that that you could get credit. (It depends on how much you had borrowed and your ability to pay back e.g.earnings).

The further into your available credit ratio you are the less likely you are to get credit.

Many lender like to see that the person they are lending to is only using 25% of their available credit. This is a common credit scoring rule.

Many 'loan sharks' will lend to people with defaults and CCJ's but the interest is based on risk. For someone young and inb a part time job you might be looking at an APR of 28%! Also they will only lend a small amount say £2,000 and see if you pay that back before lending any more.

I believe that the best thing would be to pay back your debts and update your file with checkmyfile before applying for any more credit.

P.S. In case you haven't noticed there has been a 'debt crisis' in the UK, the number of homes possessed in the first quarter of 2007, was even higher than the previous two quarters. Bankruptcies and insolvencies are up. The bank have had to write off thousands of pounds in bad bebt. ALL banks have tightened their lending criteria. They are now very wary.

what about if you miss a payment occosionally but then pay it within 1 or 2 months and get yourself back on track and have not been referred to the debt collection agency?

All creditors can see your payment record for every credit agreement (including mobile phone) you have currently open. They look at how many payments you have made late in the last three years. The less the better. The longer the time away in history they were the better. The last twelve months is the most important. Three or more late payments in the last twelve months is bad. One or two is OK. But it also depends on how many accounts you have open. For example if you have five good accounts in the last twelve months and with one account you have been scatty that will be OK. But if you have missed three payments or more on multiple acounts in the last twelve months this will bring down your score.

If you do not have any defaults (i.e. your account hasn't been referred to a Debt Collection Agency) then that should be fine.

The good news is that everyone can improve their score.

FICO (Fair Isaac) scores are like this:

* 35% — punctuality of payment in the past (only includes payments later than 30 days past due)
* 30% — the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15% — length of credit history
* 10% — types of credit used (installment, revolving, consumer finance)
* 10% — recent search for credit and/or amount of credit obtained recently

I think checkmyfile did a study and found that about one in four might have inaccurate information on their credit file. (You will have to check their site for verification). So even if you think you have a good or OK credit history it is always worth checking your score because mis recorded information can bring your score down without you knowing. Often if you query information with the credit reference agencies, they will kindly remove it for you as a gesture of good will. But it depends on what you are querying.