'I thought I'd never be able to get finance or a mortgage'
They say university is the beginning of your adulthood, but I beg to differ. Student life – I’m sure I’m not the only one who found this – was somewhat sheltered.
Don’t get me wrong, it was the best time of my life. But did it prepare me for life itself? Not so much.
I should have seen that graduating in an economic downturn was a sign of things to come. But at university, you’re told it’s the best route into the best job and the best income and the best everything.
My very frugal mother has always taught me the value of money and I thought I was doing pretty well. But after I graduated, things still got on top of me.
Increasingly hazy
After a couple of work experience stints, I naively assumed getting a job in my chosen field would be easy.
But when nothing materialised, I saw no other option than to go full-time at my part-time job. It certainly wasn’t the “graduate” salary I had expected.
Deciding to stay in London (better job prospects and travel from my parents was very pricey), was another issue, as I now had rent and bills to grapple with. While balancing these things, my other financial commitments became increasingly hazy.
I figured I had some time before my overdraft would be liable for interest. So I concentrated on making it through every month on a shoestring budget.
‘I should have been more observant’
An out-of-work period had depleted my savings when things finally came to a head.
My bank told me I owed it five months of interest, AND charges, AND it wanted its overdraft back. Interest-free holiday over.
I wasn’t prepared for this at all. I’d stopped using that particular account about a year before (due to its bad customer service) and expected (stupidly) to pay interest on a yearly basis rather than monthly.
I wasn’t aware I’d exceeded my overdraft in the first place.
I should have been more observant, but why did it allow five months of charges and interest to build up before getting in contact?
After a stalemate with the bank, I took my case to the Financial Ombudsman. (See Your Financial Rights for how it works.) At this point, I thought that by my mid-20s, I had completely wrecked my future and I’d never be able to get finance or a mortgage again.
The lesson learned
Thanks to the ombudsman, I was able to pay my overdraft off over time – something the bank had originally refused.
Now I can concentrate on the future, building up a good credit file and I’m young enough (just!) for my past mistakes to ebb away before I reach life’s important milestones.
Though I always made sure bills were paid, this experience taught me the importance of my financial profile.
Credit scores aren’t the be-all and end-all, but having a firm grip on your financial matters is important because the consequences aren’t desirable – and both schools and universities need to put more emphasis on this.
Ultimately, we’re all responsible for ourselves, but how can you be responsible when you don’t have the tools or the basic understanding?
There is always light at the end of the tunnel, though, and I can certainly see mine now.
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