How to Avoid a Christmas Spending Hangover

Naturally, we have been talking a lot these past few weeks on affording Christmas. As we reach the middle of November we wanted to focus further on Christmas spending and so sharing some great tips on how to avoid a Christmas spending hangover.

Tip #1

Budget!

OK, so we realise that it may be a little late for that, but you can still set a budget with what you have now. You may have already started your Christmas shopping and if you have finished then please share your tips with us! If you still have much to do make a list – as Santa says, check it twice! Make a list of the gifts you still have to buy, food to get and any other Christmas expenses you know you will need to afford.

Once you have your list, put an amount next to each item. If you find that you have gone overboard don’t worry, we will get to that in a moment. Just be realistic and it is better to over budget than under.

Tip #2

Be Creative with Gifts

Even if you budgeted to spend £10 on each person, but had 20 people to buy for, that still amounts to £200 and if you have children, your budget will be much higher! When it comes to giving gifts, be creative. Making jams, mince pies, truffles, cakes and festive food can be a great way of giving a gift to someone without a massive expense.

Tip #3

Share the Entertaining

If you have people coming over, talk to them about sharing the cost of entertaining. If you have several people over you could split the food up; one person brings starters, one dessert, another drinks and so on. You’d be surprised at how much money you can save if you aren’t having to pay for everything. Don’t forget, keep leftovers for the next day. It will always get eaten and what could be better than having cold turkey sandwiches or turkey stew!

Tip #4

Be Sensible!

We are talking about money here. Although we all want to spoil our loved ones for Christmas, it is all too easy to get pulled in to buying every gadget going and spending far more than we intended. Rather than buying so many gifts, think about each person individually and what they would really like. Making the gifts more meaningful means you are less likely to buy several of them and spending this way also keeps the overall costs down.

Tip #5

Borrow Wisely

Finally, if you do find that you do not have enough for what you have budgeted to spend avoid turning to high cost lenders, like payday loans for example. Although these are attractive in promising to give you the money on the same day and low repayment amounts, they can come with unreasonably high interest rates. You don’t often realise until it is too late and your new year is bogged down with debt and mounting interest. Nottingham Credit Union offer lower interest loans, quick decisions and flexible repayment options – apply online and see how we compare.

Categories: BLOG.

5 Shopping Weeks Left until Christmas!

Yes, there are really only 5 shopping weeks left until Christmas! Although a magical time of year it can get a little stressful when trying to do everything for everyone. You will by now no doubt have set a budget and started buying gifts. With food and entertaining to consider as well you might find yourself struggling to cover everything financially. We know that it can be easy to turn to a high cost lender or credit card to make ends meet, but we urge you to consider your options first. Although high cost lenders can often seem attractive – you get the money often the same day and the repayments can be quite low. What you don’t often see is the high interest rate which can run into thousands! This means that when you get to the new year, you could find yourself in debt and struggling to get out of it. We want you to have a happy Christmas and be able to afford the things you want and need for yourself and your family, without running up mountains of debt in the process!

As a fair and ethical lender, we consider all applicants regardless of circumstances, even those with poor credit histories and aim to help you manage your money better. When you apply for a loan from us you get a quick decision and flexible repayment options to suit everyone’s budget. Here is a typical loan example of how we might help you:

Borrow £500 over 52 weeks from £11.50 per week! This is based on 42.6% representative APR with a total repayment of £597.02.

Apply online today! 

Terms & Conditions apply. Loans are subject to status. Over 18’s only. Nottingham Credit Union is a responsible lender. Please contact the branch if you require any further information.

 

 

 

Categories: LATEST NEWS.

Credit Score, Myths and Ways to Improve Your Credit Score

Do you know your credit score? This blog will help you understand your credit score myths and ways to improve your credit score. Even if you do understand there might be bits of useful advice in here that you can apply to help your situation further.

The main thing to know when it comes to your credit score is that even if it is quite low, there are lots of ways you can improve it.

 

What is My Credit Score?

Basically it’s a number that usually ranges somewhere from 300 (which is at the lower end of the scale up to around 850 (which is the higher end). Your credit score gives lenders an idea of what your financial situation looks like and the credit-worthiness of a person. So for example if you have a credit score of 300 that would make a lender less likely to lend you money than say if your credit score is say, 700.

 

What is the Credit Score Made Up Of? 

The score isn’t just what is taken into account, your borrowing history and other lending factors are also involved, but the credit score is a good indication as to the likelihood of getting a loan approved.

 

There are 5 main things your credit score is made up of and these are:

1. Payment History 35%

This is your previous borrowing. So if you have got into debt previously or not paid back loans, or made late payments, this will affect this area of the score.

2. Credit Available 30%

It’s funny to understand sometimes, but something that is taken into account when lending to you is actually the amount of credit you have available to you. So if you have a lot of borrowing already (i.e. if you owe money on existing loans or cards) this score would be lower and affect future borrowing.

3. Length of Credit History 15%

A lender wants to see what your borrowing history looks like, how long you have taken out loans for and how long it has taken you to pay back. Sometimes a person with no credit history finds it difficult to borrow because there is nothing to show the lender what their borrowing behaviour looks like.

4 & 5 New Credit and Credit Mix

Even if you apply for something and it doesn’t get accepted, it can still show on your credit file. Also, borrowing too much in a short space of time can affect your ability to borrow. It is advised just to borrow when you really need it, rather than taking out too many accounts. The credit mix element means the types of borrowing, so they want to see that you can handle different types of credit.

It’s useful to know that just because one lender says no, doesn’t mean another will. Different organisations have different criteria when it comes to lending and it also depends on the type of product you are choosing, the amount of credit and the repayment period.

 

Myths

It can be confusing wading through all the information; good and bad. Here are a few credit score myths – they are simply not true!

  • My credit score is affected if I live with someone who has bad debt – unless you have a joint product with them i.e. a joint loan, this does not affect your credit score.
  • There is a credit black list. Does not exist! Lenders base their criteria on a combination of things as we have outlined above.
  • Education level affects your credit score. Definitely not.
  • Paying for everything in cash builds a good credit history. Not the case at all. You need to have some financial history to show the lender that other lenders have provided you with credit in the past and that you have successfully made repayments to clear that.
  • You should have as many credit cards as possible to show you are good at paying back debts. Not at all. Be very careful with this because you could get yourself into debt taking on too much credit and it getting out of hand. There is a balance between taking on credit to show you can make repayments and things getting out of hand. It is worthwhile only ever having one credit card, unless you are able to repay them each month and clear them.
  • Credit scores don’t affect job prospects. They can do – employers are permitted to see a slightly shorter version of a person’s credit report and could consider that a person’s worthiness for a job is based on their credit history. This would probably depend on the type of job you were applying for but it can affect it.

If you aren’t sure seek independent advice.

 

Ways to Improve your Credit Score

 

Clear Bad Debts

If you have a bad credit history, work on cleaning it up. A credit reference agency is always willing to help when it comes to giving advice on your credit score. Experian and Equifax are the most commonly used by most lenders and you can usually get a 30 day free trial to access your credit file, get an idea of your credit score and what is affecting it and get some impartial advice.

If you do have bad debt, start making repayments on all the accounts. Lenders like to see that you are working to reduce your debt and over time this will improve your credit score. If you need debt advice, contact the Money Advice Service for some free and impartial advice. Be careful taking advice from companies who promise to consolidate your debts, unless you are sure that this is going to make your repayments much less and work for you over time. The government agencies are always the best ones to approach for debt advice.

Contact the company who you have the debt with. Some companies are willing to make arrangements with you to pay a lesser amount each month for a while or even offer you a chance to pay off a lump sum amount that is less than the debt to clear it. Try to open communication with them and be honest and up front but be realistic about what you can afford to pay. Always make sure that you cover your rent/mortgage, bills and living expenses first.

Over time making regular payments and reducing your debts will work to improve your credit score.

 

Avoid Opening more than One Credit Account at a Time

As mentioned in the list of what your credit score is made up of, opening too many credit accounts or applying for too many at once can affect your credit score. Only borrow when you need to.

 

Keep your Payments Up to Date

Lenders will update their systems usually every month and so the credit reference agency will update your credit file accordingly. If you keep your payments up to date your credit file and your credit score will reflect this. If you start falling behind with payments and missing payments this will start to affect your credit score.

 

Make Payments by Direct Debit

Making payments by direct debit can help improve your credit score, particularly on your credit accounts.

 

Electoral Register

Being able to show you legally exist helps! Sounds funny but get yourself on the electoral register if you aren’t already. This simply shows that you are registered living at a property within a local area. This contributes positively on your credit score.

 

Check your Credit File Regularly

Close any unused credit accounts if you see them on your credit file. You do this by contacting the organisation and asking for them to be closed. In doing this they are not updated with the credit reference agency and are removed from your credit file. The other reason to check your credit file is to ensure that there is no activity on there that you have not carried out yourself. If you do see something suspicious on your credit file, contact the credit reference agency immediately.

 

Start Saving

Showing that you can afford to put money aside and save can help. Not only do you need to borrow less because you will have savings to fall back on, but you are creating a better financial picture too for future borrowing.

 

Credit Score Myths and Ways to Improve your Credit Score – for more advice visit:

Noddle www.noddle.co.uk

Experian www.experian.co.uk

Equifax www.equifax.co.uk

Categories: BLOG.