Many borrowers often put off seeking help with debt s worry about how a financial management plan will affect their credit score.
A good credit score is important because the higher the score, the better deals lenders will offer on borrowing – but the truth is that if you are already missing payments or making them late, then your credit rating is probably already low anyway.
Borrowers considering how to find help to deal with their debts have probably already realised that credit is monster than can get out of control – and if it does you need to rein the beast in and take back control.
Worrying about your credit rating is not a priority – and many borrowers who have come through a financial management plan are zealously against taking unnecessary credit and prefer to live within their means.
Making some big ticket purchases may be easier with a card or loan, like spreading payments on a house or car, but the real problem comes when you are spending on a card to keep up with day-to-day bills.
Starting a financial management plan will bring down your credit score because you are paying less to your lender each month than you originally agreed when you took out a loan, credit card or overdraft.
Credit profiles generally show a 36-month payment history – but if the account is closed the last 36 month’s payment history show on the profile for six year’s after the date of closing.
If your credit account is in default, then the default shows for six years.
The credit report should also list whether the account is subject to a financial management plan.
For many struggling borrowers, a financial management plan provides relief from the hassle of being chased for money you cannot pay by lenders.
Agreeing a financial management plan can also stop interest and late payment charges, while leaving borrowers with enough money to pay their day-to-day living costs each month.
—- ENDS —-
Notes to editors:
- Money Debt and Credit is one of the UK’s fastest growing financial solution companies.
- The company was founded in 2006 on the belief that every client has the right to appropriate financial advice. Since then we’ve gone from strength to strength and have helped thousands of people with a variety of financial solutions.
- We offer a range of services including Financial Management Plans, IVA s, Loans, Mortgages, Full & Final Settlements, Bankruptcy, Investments and Pensions.
- Specialties: IVA s, Financial Management Plans, Loans, Mortgages, Trust Deeds, Full and Final Settlements, Bankruptcy
For more information or debt advice contact:
Money Debt and Credit
45 Clarendon Road, Watford, WD17 1SZ
Tel. 0800 16 999 46
Image: David Castillo Dominici