Top 5 tips for beating debt
1Review your financial situation
Before you decide on the best way to sort out your finances, get as much financial information together as you can. That way you can assess whether your problem is something you can deal with yourself or whether you need expert help.
Draw up a budget
Use our budget calculator to help you compile a list of your incomings and outgoings so you'll have a clearer view of where you stand. Alternatively, talk to one of our debt experts who can help draw up a budget.
Find out your credit score
Get a copy of your credit report to make sure it's correct and up to date. Your credit file is information held by the Credit Reference Agencies that documents all your credit agreements and should be updated regularly by your lenders. If you've fallen behind on your payments or have any CCJs (County Court Judgments), this will show up on your credit file and could affect your ability to get further credit. Go to www.experian.co.uk, www.callcredit.co.uk or www.equifax.co.uk for more information.
2Tackle your debts
Deal with your priority debts first
If your budget plan shows that you have a problem, it's vital you know which debts to deal with first. Debts on payments that keep a roof over your head (such as your mortgage or rent) should always come first, as missed payments could result in the repossession of your home.
Priority debt checklist
- Your mortgage or any loan secured against your home
- Council tax, National Insurance, tax and VAT
- TV licence
- Utilities – Gas, water and electricity
- Court fines, CCJs and child maintenance
- Hire Purchase agreements
If you're worried that you can't afford the payments to your priority debts, tell your lenders as soon as possible or talk to one of our debt experts: they may be able to help you reduce the payments to your unsecured debts - credit cards, personal loans and overdrafts - so you can afford your priority debts. Reducing your payments may mean it takes longer and/ or costs more to repay your debts and your lenders are not guaranteed to accept lower monthly repayments. Your credit rating would also be affected.
Look at ways to save money
If you think you could get your finances back on track with some careful budgeting, read our money saving tips for ideas.
Cut back on credit
Look carefully at how you spend. If you're using credit for things you used to pay cash for and not paying the debt off each month, you could be storing up problems for later. Our credit card calculator will show you how long it will take you to pay off a debt and the amount of interest added when you pay less than the full amount.
3Check what you're entitled to
To make sure that you are getting all the help with your finances as possible, have a look at this website to check you are receiving all that you are entitled to
Tax credits and benefits
Information on Income Support, Working Family Tax Credits or Jobseekers Allowance is available on www.directgov.co.uk. For details on benefits go to www.hmrc.gov.uk, or visit www.entitledto.com for more information on tax credits.
Rent/council tax
For details on any help available with rent or Council Tax contact your local council.
Credit Insurance
Find out whether you have payment protection insurance on your mortgage, loans or credit cards as you may be able to claim if you're unemployed or unable to work through illness.
4Get a managed account
Debt can spiral out of control simply because of a few missed payments - interest and charges could soon mount up.
If this sounds like you, perhaps you need an account with a budgeting service built in. You'll then be able to seperate your money for your bills and see what you have left over.
5Get expert debt advice and help
When you're in debt, deciding which route to take can be a tough decision, particularly as there are so many different solutions available and so much written about them. But no amount of research can match getting professional advice and a recommendation that's relevant to your situation, even if you decide not to go with the solution suggested.
- Our expert advisors can talk you through the advantages - and disadvantages - of all the solutions we offer and explain which one is best suited to you
- Our advice is based on a thorough understanding of your income and expenditure
- We've helped hundreds of thousands of people with debt problems
- Our advice is confidential and without obligation
- 0161 669 8925
- 0161 669 8925
