Managing debt and future-proofing your finances is a target for many of us. We hosted a video on June 15th with consumer champion and BBC Dragon Sarah Willingham, Chief Executive of the Money Charity Michelle Highman, and Experian Experts’ own James Jones to provide expert tips on how to beat debt and prepare financially for the future.
The guests spoke about three main topics – Managing debt – Watch them discuss how and why people get into debt, what the common mistakes are and how we can try to avoid them, and give tips to beating debt and getting back on to an even keel.
Future-proofing your finances – Experian research has shown that the over-55s are worried about their financial future. Our panel discussed how people who fall into that demographic can help ensure they’re prepared for retirement and the probable loss of income that it brings, and also talked about how younger generations can future-proof their finances.
Financial education – The panel also spoke about what parents can do to help ensure they give their children the best start when it comes to financial education.
I had a debt relief order about two years ago and I don’t understand why it is still saying that my credit rating is bad?
It’s great that you’ve taken steps to regain control of your finances using a debt relief order (DRO). Assuming this is now fully discharged your debts should have been cleared or at least written off, which is a positive step forward for you. Unfortunately, your credit rating is likely to take a little longer to recover as your credit report looks back over the past six years of your borrowing history. But there may be things you can do to improve your credit rating right now.
Start by checking your credit report to make sure the DRO has been updated as ‘discharged’. If it hasn’t then please tell us. You should find that the accounts that were included in your DRO are shown separately on your report, which is quite usual. These accounts are likely to be shown as defaults, as you broke the terms of your agreements. Like the DRO, defaults stay on your report for six years, from the original date of default. Importantly, any defaults should also be marked as satisfied or partially settled so if any aren’t you should contact the relevant lender. If you need help, ask us to raise a query with them on your behalf. Your credit rating is likely to improve in the short term once the DRO and any individual defaults are marked as cleared, and in the medium term as they get older. Some lenders will rate your most recent credit history more highly than events that took place several years ago. However, some lenders may also have a policy whereby they refuse applicants that have a default on their credit report regardless of how old it is and whether it has been paid or not.
Additionally, if the reason for you defaulting was the result of something out of your control – such as losing your job or a serious illness – you might benefit from explaining this on your credit report. Simply send us a statement of up to 200 words describing any relevant circumstances and we’ll add this to your report. Known as a notice of correction, lenders will see this when they check your report in the future and should factor it in to their decision. Please note we can’t add a statement that is frivolous, factually incorrect or defamatory (January 2016)
You can find archived Ask James questions arranged under subject headings such as ‘applying for credit’, ‘credit and debt’ and ‘fraud’ at the main Ask James page.
Did you know the Chinese New Year takes place on Monday 8 February? The 12 cycles of the Chinese Zodiac calendar are of course represented by animals, and this year it’s the Year of the Monkey.
Among several traditions surrounding Chinese New Year, one is to pay all your debts. This is because there is a belief held by some that if you don’t pay off debts ahead of the New Year, then you might find that you’ll end the year in similar shape.
One place to start dealing with debt is to check what’s on your credit report. Continue reading →
Here’s Rachel Connor from Stepchange.org with a guest blog post to help introduce and explain more about Debt Awareness Week.
StepChange Debt Charity wants you to take control of debt! Personal debt is a cause of worry for millions across the UK, and it’s estimated that some 2.9 million people desperately need debt advice right now*. The trouble is that many people who are struggling simply don’t know where to start. They may not even know that free debt advice is available to them.
Monday 26 January will see the launch of StepChange Debt Charity’s second annual Debt Awareness Week. During this week, we’ll encourage people to get free debt advice as soon as they need it. Continue reading →