Understanding Your Credit

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Getting Out of Debt

Getting out of debt has become more difficult since the introduction of the credit card. The "buy now, pay later" mindset has left millions of consumers fighting an uphill battle. And overspending has no social boundaries -- it happens to the rich, the poor, and everyone in between.

To ensure a good credit rating, it's important to pay your bills on time. As you accrue more debt, however, you may find this effort becoming more difficult. But remember, the sooner you get started, the sooner you will arrive at your goal of becoming debt-free.

If You Fall Behind on Payments

Order copies of your Equifax Credit Report™ and Equifax Credit Rating™ and analyse them carefully. By reviewing the risk signals in your Equifax Credit Rating™, you can see which factors most affect your credit score.
Establish a budget immediately to assess your spending habits.
Lock away your credit cards and don't use them -- but don't cancel them. If you have a low credit rating, you may have trouble getting new cards.
Discuss with your family ways of cutting expenses. Setting goals and limits helps your family work together towards solutions that benefit everyone.
Consider using some of your savings to eliminate some of your debt. You might be surprised how many hundreds of pounds in interest it could save you.
Don't apply for new credit cards -- doing so can have a severely adverse effect on your credit score.
Start to eliminate your debt by paying off the account with the highest interest rate. When that one is paid off, move on to the one with the next highest rate.
Be wary of "credit repair" clinics that offer to remove late payments or bankruptcies.

Time to Seek Assistance?

If you feel that you are in over your head, it might be time to seek assistance. There are helpful agencies out there that can assist you.

There are some possible pitfalls. Be wary of "credit repair" clinics that offer to remove accurate adverse information from your credit file. Such agencies can be disreputable, preying on vulnerable consumers who are often desperate for help.

One of the reputable agencies that can help you is the CCCS, a non-profit organization that offers free financial counseling to families that need to solve financial problems. CCCS can help you analyse your situation and works with you to develop solutions. There are CCCS offices located throughtout the country. Phone 0800 138 1111 for the phone number of the office nearest you or visit the CCCS website at www.cccs.co.uk