Money

Your credit rating says a lot about you – make sure you manage it effectively.

There may be several reasons you are suddenly thinking about your credit file. It is probably because you want to take out a mortgage or loan, or maybe another bank account. Your creditor may say something like ‘we are going to do a credit check on you’ which roughly translated, means: we are going to look at how well you have managed your finances in the past, and make a judgement on whether we can trust you to manage this one. So, of course, you want it to look good. You can get a loan if you have bad credit but it can be trickier, with higher interest rates. Here are 5 tips to improving your credit file:

#1 – Existing debt: If you want to apply for a loan, you will need to consider any existing loans that you have. Any loan on your credit file should be up to date with repayments. Any late payments won’t look good, so address these issues if you can. Totally money says, “Whether it’s for a loan, mortgage, credit card, or even a phone bill, a late payment (or worse, a missed payment) is a definite no-no if you want a good credit rating.”

# 2 – Let go of past financial links: For example, you may have an old joint credit card with an ex partner. If you’re no longer using it, make sure the lender knows this. Sever any unsavoury ties and close old accounts that are stagnant or have been sitting empty.

#3 – Be stable: Lenders like applicants who have lived at the same address for a while. They like stability and will be more likely to accept your application if they can see you aren’t always darting about, changing your job or moving house. Also, make sure you are on the electoral register. They also like it when you use consistent details when applying for loans. For instance, if your name is Matthew, use that instead of Matt. Don’t change the details on various forms.

#4 – Don’t apply for too much: If you apply for a lot of loan products, your lender won’t like this. It will show on your credit report as someone who has been rejected by other lenders. Take your time to research the right loan and apply for it only when you know your credit file is ready. Make sure you always use a reputable lender. Many brands are now offering flexible options which might better suit you – so ensure you get the right one. For example, the online cash advance website Wonga lets you choose your repayment date, total loan amount and the amount of instalments you wish to pay in. If you know you’ll only need a cash advance for a few days, they won’t force you to keep the loan longer than needed. This might be better for you, and therefore better for your credit file. Choose carefully!

#5 – You can correct old mistakes: Don’t worry if you have CCJs or bankruptcy on your file. Everyone makes mistakes but your credit file evolves as you do, and within a year you can make dramatic improvements to your credit file. You have to stick at it, though. It can be difficult, but with the right mind set, you can create a glowing credit file that will make your lender very happy.

To read more on topics like this, check out the money category

Conducting business as a creditor has its ups and downs. Part of the risk you are taking is dealing with clients that become delinquent in payments. Unfortunately, multiple unpaid accounts can hurt the business and affect your bottom line. The good thing is, a creditor has rights when it comes to debt collection. However, it is essential to understand that a creditor’s powers are not unlimited when it comes to collecting payment from a debtor. Specific debt collection UK rules apply and through the guidance of these rules, a creditor can protect their business.

In this article, we will discuss the various actions a creditor can take when dealing specifically with unsecured debt from individual borrowers.

The rule on interest, charges, and fees

In the UK, a creditor can add charges and interest when a payment is overdue. But the amount only depends on what is stipulated in the agreement. It is not possible for a creditor to suddenly increase the interest rate or add excessive charges to an overdue payment.

Do banks have the right to offset a debt?

It is possible for a creditor to collect payment from a debtor’s bank account even without their permission. For example, if a debtor has a bank account and credit card with the same institution, the bank can take money from the bank account to pay for the credit card debt. Nevertheless, it is still the responsibility of the creditor to notify the debtor before taking such action.

Rules on contacting the debtor

It is a standard procedure for creditors to contact the debtor using various channels. They can send emails, letters, or make phone calls to attempt collection. Creditors can also hire a debt collection agency that will personally visit the debtor even if the creditor has not obtained a court order. Nonetheless, these collectors do not have the same responsibilities and rights as bailiffs or enforcement agents.

Hiring a collection agency

Debtors can rest assured that creditors will not sell the debt to a third-party debt collection agency unless they have been adequately notified and given ample time to try and settle their overdue payments. Once a creditor hires a collection agency to collect the debt, the agency will take over the obligation, and the original creditor loses the relationship with the client. Creditors often resort to this process when the payment is extremely overdue, and debtors are not showing any effort to repay their debt.

Sending default notices to debtors

One of the primary responsibilities of a creditor is to send default notices to debtors. This way, you are giving the debtor a chance to honour their commitment and make payment. Note, however, that this regulation only applies when the Consumer Credit Act regulates the debt. Some examples include credit card debt, payday loans, and personal loans.

Limitations

Creditors need to avoid harassing debtors during collection. The debtor can also request that creditors only contact them through a preferred communication channel. Lastly, it is not possible for creditors to breach privacy and security laws to try and collect payment from the debtor.

To read more on topics like this, check out the money category

When you’re already in your retirement, you worry because you’re not earning the same amount of money anymore. You were confident before because you knew that your income was enough to pay for all your needs, and even have enough for savings.

As you retire, your expenses will probably remain the same, but your income won’t. The first thing you might consider is getting a loan. Like any other retiree out of options, a loan is a life saver.

The problem is that a regular loan could be too much of a burden. When you start accumulating vast amounts of debt, you will be unable to pay for it. The interest will keep compounding until your total debt is way too high compared with the principal amount borrowed.

It’s also going to be a challenge for you to get loan approval because you don’t have a stable job. For most loan providers, you’re a high-risk borrower. They won’t let you get a loan unless you can assure them that you can afford to pay the loan on time, and you have sources of income that will suffice for the repayment of the loan. Such rules might be inconvenient for you, but the creditors are running a business, and they need to earn money.

Try equity release

If you’re planning to obtain a loan, you might as well consider equity release. It’s a type of loan that requires collateral. In this case, your property will be on the line. The positive thing is that you don’t need to repay the debt soon. You don’t even have to move out because you placed your property as collateral against the loan. You can stay in your house until your death. The loan will be repaid when you die, and the creditor sells the property.

When you agree to this type of loan, you’re handing over the right to sell the property to the creditors once you pass on. They can collect the money from the sale value and give the remaining amount to whomever you assigned as your beneficiary. It helps though to discuss this with your kids since they might expect to inherit the entire property. Let them know that you need money, and you only have your property to serve as collateral. They will probably understand your decision or give you a different choice to meet your needs.

With equity release, it’s impossible for your kids to have any financial responsibility for the loan in the future. There is a no negative equity rule which states that if the sale value of the property is lower than the total amount borrowed, the people left behind by the borrower won’t have to continue the repayments. Start looking for the best equity release companies now to meet your needs.

Don’t worry

With the availability of such loans, there’s no need for you to worry. You can continue living your life while enjoying financial stability. You also don’t need to bother the people you love because of your financial woes.

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When you lease a car, you do not know if you will like it. You research the car model, and you also compare it with other options. You also do not know if your needs will change and if the same vehicle will be okay for you in the future.

As you start driving, you will find out if there are recurring repair issues. Along the way, you will know if you are going to continue the lease once it is over, or if you need to look for other options. You need to observe the performance of the vehicle and how you feel about it. When you reach a point that you are unhappy with it and you are still months or even years away from the end of the lease, you might have to consider ending the contract.

The good thing is that some companies offer a termination clause in the lease. It means that you can return the vehicle before the contract is over, provided that you pay the termination fee. The amount is not as high as the remaining accumulated monthly fees, but it could still be a substantial amount. Therefore, you need to be cautious in determining if you are going to return the car.

Determine the issue

Before you decide that it is time to return the vehicle, you need to know first why you want to do it. If you have recurring repair issues, you do not wish to continue driving it as you will end up with more repair expenses. If your reason is that you like a newly released model, you might have to think again. You can purchase that model at a later date. If the end of the lease is only a few months away, you do not need to terminate the lease. Your preferred model will still be available. It might even be cheaper.

Absence of the termination clause

As you check the contract, you might realise that there is no termination clause. It is a terrible idea to pursue the transaction without this clause. However, if you are okay with it, you can use it as leverage to ask for a lower monthly fee. You will keep the same vehicle until the end of the contract. Therefore, asking for a cheaper lease is reasonable enough.

Take your time to decide

To avoid issues regarding termination, you need to take your time to determine if you will pursue the transaction. You can look for other models if the options on the table are not satisfying. Once you sign the lease, you have no choice but to keep paying your monthly payments until it is over.

The good thing is that there are top dealers out there who will offer reasonable lease agreements. For instance, you can check out www.genusleasing.com since they have some of the best car models and lowest monthly rates.

To read more on topics like this, check out the money category

Given that it’s January, most of us have spent the last few weeks pondering what we want from the year ahead. There are some common themes that define the aspirations of 90 percent of the population, and most of these center around finances, our careers, and our personal relationships.

‘Spending more time with friends and family’ is a big one, as are ‘getting on the property ladder’ and ‘securing a promotion’. Perhaps the most prevalent, however, is ‘saving more and spending less’.

Luckily for you, the latter is one we can most definitely help you with. Here’s how to do it in three simple steps.

Create a budget

It may sound as dull as dishwater, but it’s time to sit down and plan out a budget. In order to reduce your expenditure, you first need to know where your money is going, and how much you have left over to spend once the necessities are out of the way. Thankfully, it’s a whole lot simpler than it sounds. You’re going to start with two columns: your income on the left, and your essential outlay on the right. The latter should include only what you have to pay out to live – for example, your rent, your monthly fuel costs, and so on. Subtract this from the money coming in each month, plus the amount you want to save, and you’ll be left with an important figure: the amount you can safely spend on luxuries and non-essential items. Exceed it at your peril!

Shop around

So you’ve had your eye on a new mobile for the past two months and now you’re ready to buy. Before you go any further, stop. We want you to ask yourself an important question: can I get a better deal elsewhere? If the answer is ‘yes’, you know what to do. If the answer is ‘I don’t know’, do some research. This is the same process you ought to be following any time you’re planning a purchase, no matter how large or small. See how far your money can stretch and you’ll definitely have more left over come the end of the month.

Look around for special offers and promotions

We understand budgeting can be challenging. It sometimes feels like it’s sucking all of the fun out of your life, so we fully recognise that there are times when it’s going to go out of the window. On these occasions especially, be sure to look around for special offers and promotions. This is just one more way to cut your costs, so whether it’s a gym membership you’re hungering after or a quick flutter online, it’s important to see who can offer you the best deal. Let’s use the latter as an example. Sites like RealMoney.ca are a great resource, because they list lots of different casino providers and plenty of special offers for you to compare. Right now, one of the options is Party Casino Canada, which has a welcome bonus for those looking to keep costs to a minimum. Shop smart like this to save yourself some money.

When it comes to scaling back your expenditure, it really is small and seemingly minor steps that can make all the difference. Be clever, approach your objective logically, and you should have much more money left over come the end of the month.