I'm new to this forum but joined because I've been reading some of the posts and have a great deal of empathy with people who are struggling to get on with bad credit ratings. I'm now getting back on track - not without a hell of a big decision but with my credit history if I can, I'm sure there's hope for most..!!
I had huge debts (towards £50k), several CCJs, defaults, debt collectors, the whole shebang. Low income, single parent, tenant, no assets - debts accumulated by the "snowball effect" (should have never taken out the first bit of credit at all). The only way out of this was bankruptcy, this was ideal for me in my position but obviously wouldn't work for everyone - I had literally nothing to lose.
What I did - when things were getting really bad and I was looking at repayment plans/debt management etc, I went to open a bank account with NatWest. No lending facilities but they did actually give me a current account with a cheque book and solo card (not cheque card). I maintained this account 100% as even when things were really bad I knew it was vital to keep a good financial relationship somewhere.
Once it became clear that I couldn't get out of this, I made the decision to declare myself bankrupt. Just prior to submitting my petition, I went to see if I could get another bank account, just a basic one as a temporary home for my salary if NatWest froze my account (as they can do when they are advised of the bankruptcy). I went into banks and said I need a bank account but will not pass a credit check, have you got an account for which you do not check credit history - the first ones I found to say yes were Abbey (but I'm sure there's plenty more). Got a home for my money, cash card (not ideal but a means to an end). Because I had no money in there I didn't declare it on my petition and because they were not a creditor I didn't advise them of my status - probably not quite the right thing to do but it worked.
As I used the NatWest account, I had to declare this on my petition. However the other thing I did was keep in contact with the manager of the branch throughout my bankruptcy. He was really helpful, I'd asked to speak to him personally on the sensitive matter and asked what he could do to help (as my history with them was excellent) and that at some point I would need to start rebuilding my status and would like to retain an account with them. I think because I was straight with him, he stuck his neck out for me (always worth a try!!) and arranged for me to keep my account, unfrozen, in current status but with no lending facilities. He let me keep my cheque book too. He was very clear that a well maintained current account is an excellent way of rebuilding things as a basic account does not show on a credit file so gives no status at all. Once he established that I could keep my current account with them, I returned my salary payments to that account and the history of this on my credit file looks excellent.
My bankruptcy was a breeze, I guess because I had nothing. Official Receivers are great, very understanding and not judgmental at all. I received an early discharge in less than five months (again because I had nothing to give) and a few months later in Feb of this year, I applied for a Vanquis credit card and to my shock was approved. Very small credit limit but hell, it's a start and they've now increased it.
The trick is (as I've been told by many people now) to get a little bit of credit and use it but DON'T ABUSE IT. Another way of helping yourself is to go for things like mail order accounts (catalogues etc - I used shoetailor.com) which are usually really easy credit accounts to get, even a tiny bit of credit will help you. Use it periodically and pay it off straight away, this does appear on your credit file and shows a responsibilty.
Please understand I'm not encouraging the use of credit for credit's sake here but you will never get any status if you don't start somewhere. If you're granted something it's vital to stay responsible and in control - hell, I'm sure nobody wants to end up deeper in the brown stuff than they are now..!!!
I think the key things are to maintain a good financial relationship with someone. Even if your banking history is less than perfect but it's sort-able, try to keep the bank on your side. Anyone with ID can open a basic account anywhere but as this will give you no status it's probably counter-productive. If you know things are going downhill or can't see a way out of your debts, it's worth considering the IVA/Bankruptcy options but plan ahead for "damage limitation".
I know my situation isn't the same as everyone's and please don't judge your own status on the basis of what I've said here but if anyone would like to know any finer details of how I've managed to get myself back on the road of the creditworthy folk of this land, please feel free to ask.