As a nation we are in debt, there is no doubt about it and getting credit for things like mortgages, cars, mobile phones and credit cards is becoming more difficult. Knowing you credit rating and if it is low making an effort to improve it is one of the ways that you can manage your debts as well as get credit for those things that you need. For us we use credit for the little luxuries in life – like owning our own home with a mortgage, buying a new car with a payment scheme and using credit cards for security when booking things like holidays online.
Finding out your credit rating
For a few pounds, you can find out your credit rating from one of the three main credit rating agencies in the UK; Experian, Equifax or Callcredit.
Mistakes do happen – or not so much mistakes, but errors in your credit rating. For example, if your wallet has been stolen and the person that stole it uses your ID to try and take out a loan or some other form of credit in your name this will be recorded. Contact the companies and when they reply find out how you go about correcting the mistakes. Putting a plan into action to raise your own credit rating is the next step.
List your debts
Your credit rating won’t improve if you have loads of debts so the first step is being truthful with yourself – what are the debts that you have. How much are they? Where are they for? Sit down with a pen and paper and write them down – check the credit rating documents as well are there any that you have forgotten about.
With your list now sit down and work out what you need to pay off first- it’s simple you want the one with the highest interest rate to be gone first – how you go about it is what you need to work out next
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Paying off debt
With all the facts in front of you sit and work out how you are going to pay it off – unless you have come into money it’s impossible for you to pay everything off at once, but those high-interest rate debts need to be gone first. A few options stand, could you move the highest interest rates debts to lower cards (watch out for the balance transfer fees on some of these) or how about a loan so that you can pay it off in one lump sum with a smaller regular payment which is easier to budget for.
Make a timeline
When do you want to move? Or how about get a new car – that can be when you want those debts to be cleared so that you can get the loan. And when you get the loan make sure that you pay off regularly, don’t spend more than you can afford and keep on top of it.
For more information about credit ratings, and help and support getting yourself out of debt check out the TSB website.
This is a sponsored post on behalf of TSB