Bad debts can be incredibly harmful and impact your life in a multitude of different ways. You will find borrowing money becomes impossible, or, at the very least, extremely expensive. It will be tough to get simple things like a smartphone contract, and you might even struggle to pass a landlord’s credit check if you need to rent a house.
And more employers than ever before are starting to use credit checks in the hiring process – so your bad debts might even restrict your ability to work.
As you can see, bad debts can literally ruin your life – so you need to work fast – and hard – to make things right. With this in mind, here are few excellent tools that can help you get your finances back on track.
Credit reference agencies
Credit reference companies such as Experian and Equifax hold a lot of information about your financial history, and lenders, retailers, landlords and even utility companies will often use them before offering you credit. And, if you have bad debts, it will impact your score – meaning you may not be able to borrow money, get a mortgage, or rent a property. So, you have to make sure that you know your current position by signing up to one of the services and checking your credit report. Highlight all debts that are causing you problems and ensure that you target these first when you start thinking about repayments.
Online money managers
There are plenty of money management tools out there which can help you organise your finances – which is critical if you want to tackle your debts. Services such as 7 Days, 7 Ways and YNAB will help you track every penny you are spending and work out what you owe, where your spending priorities should be and offer advice on boosting your income.
If you have ever owned a credit card in the past decade or so, there is a good chance that you will have been charged payment protection insurance – or PPI. Plenty of people have been mis-sold PPI, and in many cases, you can claim it back from the banks. So, find out how a PPI refund is calculated, and do some quick maths to get an estimate of what you are owed. Apply for compensation if you have believe you have been mis-sold, and if you receive a lump sum, you can put that towards your debts. Bear in mind that if you have credit card debt, there is a good chance that PPI payments will make up a substantial proportion of that debt – so your compensation might reduce your overall debt by a significant amount.
Bill Alert tools
When you need to pay off a lot of bills, tracking when they are due can get complicated. However, it’s something you must do if you want to keep lenders happy and improve your credit score. The good news is that tools such as Finovera and many others can help make it easier for you to deal with your bills from one place. So, when due dates come, you get an alert sent to you so that you can avoid all the associated charges that accompany missing payments.
Any more tools to add? Let us know about them in the comments section below.