Tuesday, 6 December 2016

Getting your festive finances in order

This time of year is a real strain on families finances, it’s so difficult you feel like you need to spend X amount just to keep up with everyone else.  There is a huge pressure to give your children as much as you can even if it means stretching yourself to breaking point!

Usually we would apply for another credit card just to tide us over and then clear it as soon as we could in the New Year.  I am surprised its only one in five worrying about the cost of Christmas – I feel it gets bigger each year, now we have Christmas Eve Boxes and Elves visiting with daily treats (Bah humbug indeed!) to go with the mountain of presents children seem to get these days, the weight of Christmas debt is crushing us.  I try and scale it back, but it’s hard when the boys expectations are shaped by society as a whole.  You just seem to spend the whole of December wrapping presents...

Its no wonder January is the most depressing month with all the debt repayments that follow Christmas.  You need to be as savvy as you can though if you do need to get into debt, look for the best interest rates on credit cards, shop around, and do your research.  If you have a bad credit score you might be offered a very uncompetitive rate – so check sites like www.clearscore.com to see what you can do to help improve matters and pay as little interest as possible.

Hubbie and I are already signed up we liked that Clearscore is completely free to use and very informative.  34% surveyed did not know anything about their credit score because of the cost involved finding out, but with Clearscore there are no such excuses for keeping your head in the sand.  You can flag up any issues you have if you’re worried about irregular debt and see graphically how your debt is doing (ours is finally showing a downward trend hooray!).

Justin Basini, CEO of free credit checking service ClearScore, said: “Lenders reserve the lowest rates for those with better credit scores, so it pays to start improving yours now." 

Here are his tips to help you get a better score:

1. Sign up to see your credit score – you can get can your free score and report at ClearScore and track your progress using our handy Timeline.

2. Check your report thoroughly, regularly and always before applying for credit – report and correct any mistakes you see as this could be damaging your score.

3. Make sure that your bank and any credit providers have your correct address. (it sounds obvious but its amazing how many people don't notify everyone when they change address).

4. Ensure you’re registered on the electoral roll – this is a very simple way of boosting your score.  (We were turned down for credit cards before hubbie was added to the electoral role so I would definitely agree with tip number 4!).

5. Make sure that your name is on some utility accounts – the greater the evidence that you borrow and repay your credit regularly, the better your credit score will be.

6. Your score will increase if you use a smaller percentage of your available credit limit.

The best approach to Christmas is probably not to get into debt at all, but I get that it’s not always feasible.  In that case do get your credit score and improve it as much as you can before applying for the short term credit you need, you won’t regret putting in a little effort to secure a better rate.

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