Monday 1st of February 2010
Credit records can become a "real mess" if people fall behind on their credit card repayments, a new report says, although you may find an individual voluntary arrangement (IVA) answers your unsecured debt concerns.
In order to prevent a credit record from being seriously damaged, you should not apply for a number of different credit cards at the same time, lovemoney.com advises.
Applications for credit go on your record and so you may want to stop researching plastic because this could highlight to lenders that you are reliant on credit cards and from this, they may deem you as a risky borrower.
Rather than applying for more credit, an IVA could help you. IVAs can make your plastic debts of more than £15,000 more controllable, making it easier to repay what you owe.
An IVA will leave a mark against your name, but it could be argued that leaving debt to spiral out of control into a bankruptcy will prove more damaging to your future financial security.
Commenting on the damage credit card debt can do to you, lovemoney.com says "any black marks on your credit rating will likely see you rejected for the very products which will make getting out of debt that much easier".
By Kim Parsons
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA advice could stop missed credit card repayments
