The do’s and don’ts for Financial Success – Money Expert

Now more than ever it pays to be savvy when it comes to getting the credit you need to run your life. Luckily, you don’t have to be an expert to stay on the money. These simple steps could help you find financial success.

Do know what you owe…

In the current climate, you need to know exactly where you are before making plans – and what you really owe could come as a wake-up call. Instead of wading through files and old bills, you can find your credit accounts, from credit and store cards to loans, mortgages and even mobile phone accounts, listed in your credit report, along with your repayment record. You can see your Experian credit report for free with a 30-day trial of CreditExpert, the online credit monitoring and ID fraud protection service.

…and don’t stick your head in the sand

The worst thing you can do is nothing. Interest could be mounting up on borrowing you’ve forgotten, so you could end up owing even more in the long run.

Do keep up with your repayments…

It can be tempting to skip the occasional repayment if you’re having a tough month but you could rack up penalties and interest – and it will be recorded on your credit report for at least three years, where lenders will see it when you make a new application.

…and don’t be afraid to talk to your lenders

If you’re having financial problems it’s in their interest, as well as yours, to come up with a sensible solution.  Together, you may be able to agree a new schedule of affordable payments, although this may mean that it will take longer to clear what you owe.

Do your research…

When you need a card, loan or credit account of any kind, research what’s on offer – visit personal finance and price comparison sites to see what’s out there and what matches your circumstances. You’ll stand a better chance if you ask for an appropriate and affordable deal.

…and don’t take a scattergun approach

There’s no point in firing off lots of applications in the hope that one of them will succeed. Not only could you get turned down, but you could damage your credit rating in the process. Each application will trigger a search by the lender and these leave a record on your credit report. If other prospective lenders see a lot of these, they could fear you’re overstretched, out of financial control or even suspect a fraud.

Do shred before you bin…

ID fraud is one of the UK’s fastest-growing crimes, so make sure thieves can’t get hold of personal or sensitive information from your rubbish and use it to borrow money in your name or max out your accounts.

…and don’t put too much in the recycling

You may think you’re doing your bit for the environment but you could also be offering a free gift to a thief. Remove the address or account information from all letters and documents before you put them in the box – even an old catalogue could put your ID at risk if a bin raider picks it up.

Do check your credit report regularly…

Lenders look at your credit report every time you apply to them and when they’re setting interest rates and other conditions, so it pays to be sure that all the information it contains is up to date and accurately reflects your situation. You’ll also be able to spot suspicious applications or transactions that could indicate attempted ID fraud.

…and don’t assume everything’s okay

If you haven’t received any payment demands or red bills, don’t assume you have a good credit rating. A simple clerical error or misunderstanding could damage your credit status, so make regular checks on your credit report part of your financial routine. A credit monitoring like CreditExpert can help – members receive an email or text alert every time there is a significant change, like a late payment recorded by a lender or a large change to a credit account balance.

Do put a shine on your credit history…

If you can demonstrate that you are a responsible borrower with a stable lifestyle, you have a better chance of getting the deals you want. You can improve your credit status by taking simple steps – for example, ask lenders to correct any errors in your credit report, close unused accounts and register to vote at your current address.

…and don’t assume the past is over and gone

If you’ve been bankrupt, taken out an IVA or had court judgments against you for debt, the evidence remains on your credit report for at least six years and even a missed repayment can be seen by lenders for at least three years. If special circumstances, such as illness, an accident, redundancy or divorce, were behind any past problems, you can add a note of explanation that lenders may take into account when deciding whether to make you an offer.

Do ask for help

If you’re having problems, get free, professional advice. Try Citizens Advice at adviceguide.org.uk, National Debtline at nationaldebtline.co.uk or the Consumer Credit Counselling Service at cccs.co.uk. As well as offering advice on how to manage and reduce your debts, these organisations have the legal right to negotiate with creditors on your behalf.

…and don’t be tempted by offers that are too good to be true

“There is no magic spell that will allow you to walk away from money troubles without any consequences and only you can sort out your credit status, so be wary of miracle cures for your financial ailments. They almost always cost you money you can’t “