Wednesday 23rd of September 2009
The Treasury Select Committee has announced that it is to see how much damage shopping around for the best personal loan and credit card deals causes to a person’s credit rating.
Britons could be penalised for exercising their consumer rights during the search for the best unsecured loan offers. However, should household coffers need to be propped up by credit cards or personal loans, a debt management plan could be a better option.
Indeed, because a debt management plan can extend repayment periods and reduce the interest on unsecured borrowings, Britons may find they can meet their financial commitments without relying on the credit crutch.
Commenting on the announcement, Tim Moss, head of loans and debt at moneysupermarket.com, said a full application needs to be made in order to establish the size and rate of a loan.
But this leaves a mark on consumers’credit ratings and can lead to an increase in annual percentage rates on any future applications.
Households which have already been caught out by this, and therefore now struggle with high interest repayments, may want to undertake a debt management plan to reduce this rate.
By Ashley Littley
