Understanding your credit report: the 8 most-asked questions
If you over-indulged this holiday season, you’re not alone. And we’re not just talking about food, either. If, like many of us, you overspent this season and blew the holiday budget, here are a few tips on how to recover from the New Year debt blues.
Face the debt monster head-on
Don’t avoid your bank, credit card and store card statements. Yes, it’s scary – but it’s vital that you find out where you stand as quickly as possible. Go through them line by line to make sure there aren’t any mistakes. Then, once you know the size of the debt, you can start making plans to tackle it.
Request a copy of your credit report
Your credit report can give you a good indication of how good you are at paying your monthly bills and debts. To get a handle on your creditworthiness, and help you manage your money better in 2020.
Stop the problem from getting worse
Once you know how much you’re in for, your aim is to pay off the debt as quickly as possible. Step 1: put your credit card away. Now create a line in your budget specifically for debt repayments. Remember, the aim is to pay off more than the minimum amount each month to reduce interest charges. You don’t have a budget? Now is the time to start.
Consolidate your debt
If you’ve really overdone it and have a lot of short-term debt that you’ll battle to pay every month, you may be able to get some relief by consolidating it all into a single personal loan, with a lower interest rate. Talk to your bank to help you in this regard.
Use your bonus wisely
If you’re lucky enough to be getting a bonus, use that money to take a large bite out of your debt. This is not the time to be going on another spending spree!
Make sure you plan better
Look at how stressed you are right now – and start planning now how to avoid a repeat next holiday season. Work out how much you spent in total last holiday, and how much you expect to spend at the end of the year. If you can, start saving a bit each month now. If not, stick to your budget like never before. Your stress levels will thank you in 12 months’ time!
Remember get your free credit report from TransUnion. You have a right to a free one, once every 12 months.
According to TransUnion’s most recent Industry Insights Report, consumer debt has increased sharply in the past 12 months.
For many people, accessing, reviewing and understanding their credit report and score is a daunting task.
Credit providers use your credit score to measure their risk in taking you on as a client before they approve or decline your application for credit, or for an increase in your credit limit.
