| Recently, there has been a tidal wave of bad | | | | can think you're desperate or even that a fraud is |
| news for anyone who relies on credit - and that | | | | being planned. |
| means almost all of us. Repossessions are at an | | | | 5. Consolidate |
| eight-year high, property values are falling and | | | | Look at rolling up several debts charging high |
| lenders are turning down up to 60% of | | | | interest, such as credit cards, into a single, |
| applications for credit cards, loans and mortgages | | | | cheaper loan. There are plenty of financial |
| - one analyst estimated that 3.5 million people | | | | comparison sites with calculators that can help |
| were turned down for cards, loans and | | | | you to identify the best option. |
| mortgages during 2007. | | | | 6. Consider remortgaging |
| It hardly seems surprising that financial counselling | | | | If your problem is cash flow but you own a |
| services report that 2008 has kicked off with | | | | considerable proportion of your home, you could |
| record numbers of calls asking for help. | | | | remortgage - but be aware that you'll be charged |
| The place to start is your credit report, which lists | | | | fees and that you'll be paying off the loan for a |
| what you've borrowed and how well you're | | | | long time. You should also bear in mind that, a |
| managing your repayments. It gives you a | | | | mortgage is secured against your property, which |
| snapshot of your current status and can help you | | | | means that you could lose your home if your |
| to see where you should cut back and if you | | | | situation doesn't improve and you can't pay back |
| could close some accounts altogether. | | | | what you owe. |
| Lenders check it when they decide whether to | | | | 7. Avoid repossession |
| make you an offer and what terms - such as | | | | Try not to hand over the keys to your home - a |
| interest rates - to set, so it is crucial that it's up | | | | repossession will scar your credit history for |
| to date and accurately reflects your | | | | years and make it hard for you to own property |
| circumstances. Then check these tips on further | | | | in future. Instead, look for ways to supplement |
| steps you can take -and what to avoid. They | | | | your income. For example, you could take in a |
| could help you to make it through the credit crisis. | | | | lodger, sell off unwanted clothes or furniture on |
| 1. Don't miss any payments | | | | eBay or at a car boot sale, or get a part-time job |
| Pay your bills and make repayments on cards, | | | | in the evenings or at weekends. |
| loans and your mortgage on time - you'll only rack | | | | 8. Avoid "quick fixes" |
| up worse debts, incur penalties and damage your | | | | Don't think an IVA or bankruptcy is an easy way |
| credit rating. | | | | out. These stay on your credit report for at least |
| 2. Talk to your lenders if you're in trouble | | | | six years and, even after the IVA has finished |
| They may help you to work out a schedule of | | | | and the bankruptcy is discharged, you will find it |
| repayments you can afford or arrange a | | | | difficult to borrow |
| temporary payment holiday while you sort | | | | 9. Get free advice |
| yourself out. | | | | If you're still having problems coping, you can get |
| 3. Review your spending, set yourself a budget | | | | free advice on anything from assessing your |
| and stick to it | | | | situation to your legal position. Try Citizens Advice, |
| It can help to write down everything you spend | | | | the Consumer Credit Counselling Service or the |
| over a few weeks so that you can identify | | | | National Debtline. |
| unnecessary expenditure. Trim your bills while | | | | 10. Check your credit report regularly |
| you're at it. Try price comparison sites to find the | | | | Your personal credit report will change as your |
| best deals on gas, electricity and telephones, as | | | | circumstances change, so you can see how well |
| well as loans, mortgages and credit cards. | | | | you're doing and it can act as a wake-up call if |
| 4. Resist the temptation to apply for credit to | | | | you've let things drift. Make sure that every entry |
| tide you over | | | | is correct and up to date and reflects your |
| If you end up borrowing simply to cover your | | | | current financial situation. |
| existing repayments, you'll soon rack up debts | | | | Christian is an author of several articles pertaining |
| you can't manage at all. And every application will | | | | to Debt. He is known for his expertise on the |
| be recorded on your credit report - if you leave | | | | subject and on other Business and Finance related |
| lots of these footprints in a short period, lenders | | | | articles. |