Bankruptcy is a legal process that relieves you off your debt for some time, but in the long run, declaring bankruptcy can have a very serious effect on your credit report and remains for almost 7-10 years on your report affecting your ability to get loans in the future. So, I am going to present you with four alternatives that can save you from bankruptcy. Going for one or all of these options is definitely better than going bankrupt.

1. Enter an IVA Program

An IVA is an individual voluntary agreement that is a legal binding contract between you and those you owe money. After you have signed an IVA, you get a period of time, usually 5 years, during which you can pay off the debt you owe. It prevents all the creditors from taking any action against you. The best thing about an IVA is that you get to keep your home and personal items. Over the past few years, IVA’s have become a lot more popular. If you want IVA help and information, head over the link and learn more about it.

2. Sell Some Assets

Paying off debt should be your foremost priority. Sell whatever you have in excess and whatever you can live without. If you notice that you can’t keep up with your payments, immediately take action. Many people think that they can’t live without luxurious things, but in the long run, you will understand that it is only temporary and things will get better.

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3. Talk With Your Credits

Now I know this sounds crazy, but hear me out. Most creditors would rather get some money from you than getting none at all. Bankruptcy affects your creditors as much as it affects you. If you talk with your creditors before filing for bankruptcy and let them know that you are having financial difficulties they might listen. Most creditors have special hardship programs to assists you in your time of need. Ask them if they can lower the amount of monthly payments or lower your interest rate. Believe it or not, you can sweet talk you way out of bankruptcy.

4. Get Help from Friend and Friendly

Borrowing money from friends and family is a very bad idea, and it should be your last resort. Money has the power to create misunderstanding between lifelong friends, so you should be very careful. Calculate how much money you need and how much money can you pay off on your own. Never take more than what you need and pay up as soon as you can. Most importantly, before asking them for money, you should have a clear plan on how you are going to pay them back. Your family and friends will happily help you but don’t take advantage of their kindness and earn their trust for the future by paying them what you owe without them asking for it.

The only exception is errors, as they can be disputed immediately and removed. However, there are ways to address the other negative entries in your record. In this article, we’re going to show you the steps you should take to remove bad entries from your credit report.

Pull Your Credit Report

The first thing to do is pull your credit report to see if there is anything there. Just because an account has been in collections for a while and you’ve been getting calls and letters, don’t automatically assume that it was reported. If you are past due on an account but it hasn’t been reported to credit reports, you can still prevent the negative reporting by working with the company to pay the bill.

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Companies like Verizon, for instance, will often be open to dealing with you and finding a deal. If you want to know how to do that, Crediful has a few tips on how to handle past due accounts with Verizon and what you can do if it was already reported.

Know that it is not in their interest to send your account to a debt collection agency. Why? Because they aren’t actually collecting the debt on behalf of the company. Your debt is sold to them for pennies on the dollar, and they then accept the responsibility for your debt. Companies like Verizon would much rather strike a deal with you than lose their money. So if it hasn’t been long, chances are you can work out something before you have to deal with a bad entry.

Clean Up the Errors

A surprising number of credit reports have errors on them, and some of these errors do hurt your credit score. This is why you want to address all errors immediately and always make sure that you order your mandatory free copies from all three major bureaus - Experian, Equifax, and Trans Union - once a year.

For example, debts falsely attributed to you that belong to someone else or accounts that should have aged off your account should be removed. Debts might be duplicated or the amount is incorrect. There are several ways to address this.

You can contact the company to remove it, but you'll have to provide evidence that they made a mistake. The benefit of this approach is that their correction should be picked up by all three credit bureaus. The downside is that they have thirty days to remove it, and they may not do so.

You can also dispute the entry with the credit reporting agency itself. This is the best approach if the company doesn’t respond or the error only appears on one credit report. If both of these methods fail, you can take the matter to the Consumer Financial Protection Bureau.

Try to Remove the Correct Negative Entries

Suppose the late payment has been reported to the credit bureaus, and it is a legitimate issue. You shouldn’t dispute that as an error when it isn’t. However, you can ask the company to do a “goodwill adjustment”. After you’ve either paid the debt or entered a payment plan with the creditor, you can ask them to remove the negative entry out of “goodwill”. Note that most creditors will only do this if you have a long history of on-time payments. This means you might get a late house or car payment removed if it was truly a one-time occurrence but not if you’ve had several.

You could also negotiate a pay for delete agreement. This is a request to remove the negative entry on your credit report as a condition of repayment. However, you have to make sure that it is down on paper or else they might not hold up their part of the deal.

Monitor Your Credit Report

Unfortunately, credit reporting is an ongoing process. This means you need to constantly monitor your credit for future errors and mistakes after verifying that the entry you requested removed is gone. You may have to try another tactic if the negative entries aren’t removed or even reappear.

Conclusion

Negative entries on your credit report take up to seven years to disappear. However, there are tactics you can use to remove the negative entries, especially if you’ve corrected the situation.

But what exactly are MCAs? And what are the pros and cons for business owners looking for a quick cash fix when facing cash flow difficulties? Michael Foote, Managing Director at Quote Goat, answers these questions below.

MCAs explained

Merchant or Business Cash Advances are advance payments made to a business in exchange for an agreed percentage of future sales through credit or debit cards.

More suited to businesses that take a reasonable proportion of their income through credit or debit cards, a Merchant or Business Cash Advance is considered a short-term, unsecured business loan based on future sales.

In agreeing to a Merchant or Business Cash Advance, a business effectively sells a proportion of their future sales or income in order to receive a large cash sum to aid increased cashflow.

A Merchant or Business Cash Advance is considered a short-term, unsecured business loan based on future sales.

Pros

Compared to conventional business bank loans, Merchant Cash Advances come with a host of benefits to businesses in need of additional cash:

High approval rate: Merchant Cash Advances have a typically high approval rate when compared to traditional bank loans, meaning younger businesses who often struggle with cash flow are more likely to benefit as a result.

Speedy cash injection: Once a loan has been approved, Merchant Cash Advances have a quick turnaround, where businesses are normally in receipt of their requested cash injection within 24 hours.

No interest rates or APR: Compared to conventional bank loans or other means of business funding, Merchant Cash Advances have zero interest rates, providing a more manageable loan option for both small businesses and start-ups.

No fixed payment amounts: Unlike other business loans, Merchant Cash Advances operate on an agreed percentage as opposed to a fixed payment, where the business in receipt of the loan pays a daily percentage on the sales received. This means that during quieter sales periods, the business does not struggle with the return of high loan payments.

Cons

Shorter payment terms: The payment terms offered through a Merchant Cash Advance tends to be shorter than conventional business loans. Therefore, it is important for the recipient to be as accurate as possible when forecasting future sales to ensure the loan can be repaid in full within the given timeframe.

Not suitable for all businesses: If your business does not receive payments through either debit or credit card, or only a small percentage of sales are received through cards, then it is unlikely that you will be able to receive a sizeable loan amount compared to alternative options.

To find out more, visit: https://www.quotegoat.com/business-finance/merchant-cash-advances/

Nearly half (43%) of homeowners aren’t aware of all the steps in their mortgage process.

Dilpreet Bhagrath answers some of the most-searched-for questions about mortgages, to help both current and potential homeowners prepare for any potential obstacles in the mortgage process.

1. What happens if your mortgage lender goes bust?

Don’t panic. There will be a process in place to protect you.

Contact your lender as soon as possible to ask for their advice on the next steps with your mortgage. In some instances, they’ll continue to honour the product until the end of your mortgage term, with the help of another lender who might purchase their portfolio of mortgage loans. In most cases, the terms of your mortgage agreement won’t change.

In the case of the recent acquisition of Tesco’s mortgage book by Lloyds Banking Group, once the accounts have been transferred over, customers’ mortgage terms will remain as they were with Tesco. This should give customers peace of mind that their mortgage is being proactively looked after whether they’re partway through their mortgage or coming to the end of the term.

2. What happens to your mortgage when you move house? 

If you’re moving to a new home, you might be able to take your mortgage deal with you. Simply ask your lender about the process of ‘porting’ your mortgage arrangement.

During this process, the lender will need to value the new property to see if they’re happy to lend on it. If the new property is larger, it's likely you’ll have to borrow more (known as a 'top-up'), and you’ll have to prove to your lender that you can afford the higher repayments using your income, outgoings and other payments. It’s important to remember that the ‘top-up’ will be based on the mortgage deals available from the lender at the time, not on the same interest rate as your current deal.

Should they decline your request to borrow extra money, you’ll need to pay the early repayment charge on your current mortgage and find a new lender to finance your new home. It’s worth speaking to a mortgage broker to find the most suitable outcome for your personal circumstances.

3. Can you get a mortgage if you’re self-employed? 

There are 4.85 million self-employed workers in the UK. It’s estimated this number will rise to 5.5 million by 2022.

While it can seem like a trickier process, self-employed people can still successfully apply for a mortgage.

Make sure you’re prepared with at least two to three years’ of financial documents as this is the amount some lenders will require. Keep your personal and professional bank accounts separate, and registering for the electoral roll can help lenders to confirm your identity.

As always, it’s to consider any personal and future circumstances when securing a mortgage and seek professional advice to ensure you're aware of the options.

4. Can you get a mortgage if you have bad credit? 

All lenders will conduct a credit check when you apply for a mortgage with them. Many people will assume that if they have a poor credit rating, they won’t be able to get a mortgage. But that’s not always the case.

There may be options out there. It’s important to remember that some credit issues carry less weight than others. Factors including how much bad credit you have and how long it’s been since the incident occurred will all contribute to whether the lender approves your application.

Some high street lenders will consider offering you a mortgage deal if they consider your credit issues as small.

It’s worth being aware that the mortgage deals available to those with bad credit will often have higher rates and fees, and they may require a larger deposit.

Speak to a mortgage broker to discuss the options available to you based on your situation.

5. Can you get a mortgage if you have an overdraft? 

It’s possible to get a mortgage with an overdraft, but your debt-to-income ratio will be taken into account. This includes the portion of your monthly income that goes towards paying credit card bills, loans and student finance. This is assessed to ensure that you’re not financially overstretched and can afford your monthly mortgage repayments.

If you’re actively using your bank’s overdraft or paying one-off, this will also be taken into account during the mortgage application. When lenders assess your monthly income and outgoings, any money used to pay off the overdraft will be accounted for.

Taking out a personal loan in the run-up to applying for a mortgage will impact your affordability assessment as these repayment costs will also have to be considered by the lender. It’s also advisable to cancel any unused credit cards before you apply for a mortgage, as lenders look at the amount of credit available to you, not the amount you actually owe.

Buying a home is one of the biggest financial and emotional commitments someone will make in their lifetime. Speak to a mortgage broker to discuss what options are available to you and lead you through the process. 

For more information on mortgage complications or costs, head over to https://trussle.com/blog/ for advice and tips.

A good credit score provides you with so many benefits, such as reasonable interest rates, faster loan approvals, and suitable insurance policies. Nearly 70 million Americans are suffering from bad credit because repairing your credit requires a lot of time and self-control. So, what is the best way to improve your credit score in no time? The answer is simple – buy a tradeline.

But, in order to understand how to improve your credit score by using a tradeline, you need to understand the term “tradeline” first.

What are tradelines?

A tradeline is basically any account appearing on your credit report. A tradeline keeps a record of creditor’s information to calculate his credit report. You can mutually benefit from someone with positive credit history and improve your credit score if he adds you as an authorized user (AU).

Most people ask their family and friends to add them as their AU, but if you want a quick improvement to your credit score, you can add users with exceptional credit history as an authorized user. These AU provide positive data regarding:

• Payment History
• Amount owed
• Length of history

Fair Isaac Corporation (FICO) places a credit score in 5 different grades.

• 720-850 Excellent
• 660-719 Good
• 620-659 Average
• 580-619 Below Average
• 350-579 Poor

Buying 2-3 seasoned tradeline can help you jump to a 720-850 credit score in a month.

What will a tradeline help you achieve?

A tradeline helps you improve your credit score so it will reap all the benefits a good credit score enables you to achieve. Without a good credit score, you will have limited access and services of your credit card, loan plan, and a higher rate of mortgages. In short, you will have to end up paying more money than usual.

But good tradelines on your account will help you achieve a credit score of 750 or higher in no time. When you buy an authorized tradeline from someone like Personal Tradelines, you are added as an AU to one of their credit card accounts, and it takes only 25-30 days to get your credit up to a good score.

Common mistakes people make when buying Tradelines

·         Having no idea of how tradelines work

The most common mistake people do is buy a tradeline without having the slightest idea of how it works. I recommend that you read all about tradelines and their types before actually committing to buying one. You can also get help and information from tradelines vendors.

·         Buying tradelines in hopes that it will unfreeze their accounts

Tradelines work by adding positive information to your account. If you have fraud alerts or credit freezes on your account, buying a tradeline will not work as new information can’t be posted on your credit report.

·         Understanding the age factor of tradelines

The effectiveness of a tradeline is always going to be relative to how old your own account is and what is in your credit file. For example, if you have a 10-year-old account, an 8-year-old tradeline would not have much impact on it. However, if the account is only 1-2 years old, an 8-year-old tradeline would do wonders in increasing your credit score.

·         Not having an idea of how credit score works

Before buying tradelines, it is vital to know how a credit score impacts your general lifestyle. Because even if you are successful at getting a good credit score after buying tradelines; you will have to follow a particular set of rules to maintain it.

·         Going cheap

Some people go for 4-5 cheap tradelines instead of buying 2-3 seasoned tradelines. It ends up costing you more money, and you are better off buying seasoned or authorized tradelines rather than a lot of cheap tradelines.

Also, a cheap tradeline will not have that much positive effect on your credit report as they don’t have good age. This works against the goal of improving your credit score exponentially.

·         Buying tradelines for shady companies

Unfortunately, there are a lot of companies that are selling tradelines, and it is tough to trust someone random. It is essential to do a background check on a company which includes customer reviews, their ratings, and some money-back guarantee to make that you are getting the best service possible.

Here Chris Heerlein, author of Money Won’t Buy Happiness – But Time to Find It,  and Investment Adviser Representative and partner at REAP Financial LLC, provides expertise on the little known tax breaks you could be making the most of.

The Tax Cuts and Jobs Act of 2017 gives us a lot to think about when crafting a financial framework. With the legislation scheduled to run through 2025, you want to be aware of certain provisions and exceptions in the tax-reform law and how you can take advantage of them.

State taxes

The tax-reform changes impose a $10,000 limitation on the deduction of state taxes. The IRS says that maximum does not apply to property taxes imposed on business property. For those of you with home offices, to the extent that you can allocate real estate taxes on your home to that office, understand that’s deductible outside or above the $10,000 limit.

Home equity lines of credit

If you take out a home equity line and use the proceeds to reinvest in your home, such as a new kitchen or a new wing in your bedroom, the interest remains deductible. But if you use those proceeds to, say,  pay off college tuition or credit cards, there’s no allowable deduction. We see families borrowing money on their home to use for repairs, improvements, and sometimes even to cover retirement income and keep their tax bracket under control. Borrowing home equity can be good, but you need to keep track of what you’re doing with the proceeds because if they’re invested in the home, you can still take a deduction.

Charitable contributions

These are deductible, as they always were, but the reason to be concerned about this category is the doubling of the standard deduction. Prior to the new tax law, only about a third of people in the United States actually itemized deductions. And after this increase in the standard deduction, guess what? It goes down to less than 10% of Americans.

Think about that: 90% of people will claim a standard deduction. Now, why does that affect charitable contributions? Well, as you may know, you can claim a deduction for a charitable contribution only if you itemize. If you don’t itemize and take the standard deduction, you get no tax benefit for charitable contributions. But here are some workarounds:

For people over the age of 70 ½ — the age when you have required minimum distributions on your IRAs and 401(k)s — there’s something called a qualified charitable distribution (QCD), and you can take up to $100,000 out of your IRA each year and basically have it sent directly to a qualified charity. This is a wonderful strategy for families that give small amounts and large amounts. And you avoid all tax on that distribution that ends up at the qualified charity. You can claim the standard deduction and still avoid tax on the IRA required distributions, but remember, the first dollars you give to charity should be money out of your IRA.

What about those of you younger than 70½? Here’s what you might want to do. This is a little outside the box but it’s a powerful strategy. Bundle several years or so of contributions to your qualified charity. Let’s pull five years out as an example. You can actually bundle these contributions into a single year so that you will go over the standard deduction in that one year and claim a deduction for the excess contributions. A Donor Advised Fund (DAF) is when families put money into the fund, they get the full tax deduction for whatever goes into the fund that year, plus they can distribute that money over time, at their direction. I recommend this a lot of times to clients, especially those taking the standard deduction.

Entertainment and meal expenses

There are some big changes when it comes to entertainment expenses and meal expenses. The new tax law disallows any deduction for entertainment expenses period. Meals — an integral part of business dealings, of course — are a bit different. The IRS says you can still deduct the meal expense as long as you have a separate receipt. Going forward, make sure that your food costs for clients are separately stated on those invoices and receipts. That’s a big one and can add up fast.

Then there’s the very important SSA-44 Form. Let’s say you’re a high-wage earner and you are going to work half the year when you retire at 65. You get off the employer health care plan and go on Medicare. Well, the government dictates your Medicare premiums by how much income you report. If you go over these thresholds, you are going to get a letter in the mail that says, “You’re Medicare premiums are going up.” And I’m talking perhaps $500-plus per person more for the same coverage your neighbor is getting. The SSA-44 Form is something you would file with your tax return in a year that you retired and were over these income limits, and they’ll give you a once-in-a-lifetime exception around those limits.

The average American has a credit score of 704. If your Fair Isaac Corporation (FICO) score is around that number, that’s fantastic. But even though that’s a pretty healthy figure, there’s still plenty of room for improvement. And if your score is lower than that, don’t lose heart. You can do plenty to bring up your credit score - it all boils down to making the right financial choices over time.

1. Get A Copy Of Your Credit Report

If your credit score is lower than expected and you’re not sure why, it’s a good idea to get a copy of your credit report. This document spells out all your credit-related activities. You should be able to get a free copy of your credit report each year and Best way to repair credit from either Experian, Equifax, and TransUnion.

Go through the document thoroughly to check for errors or fraudulent activity. If you don’t find any, you should be able to find out what’s affecting your score, such as late payments, repossessions, and so forth. By having a clear picture of your credit standing, you’ll have a better idea of how to improve it.

2. Pay Your Bills On Time

Your payment history shows potential creditors how reliable of a borrower you are, as they’re indicative of how you’ll be paying in the future. Doing something as simple as paying bills on time can make a significant positive difference to your credit score. Conversely, paying late — or less than the agreed-upon amount — can damage your credit score.

Your credit card bills are the most important when it comes to your credit score, but this can also be affected by your other bills, such as student loans, rent, and even your phone bill. To make sure that you don’t miss any deadlines, you can set up automatic payments or calendar reminders to help you stay on schedule. If you’re behind on payments, try to catch up as soon as you can.

3. Improve Your Credit Utilization Ratio

Your credit utilization ratio (or credit utilization rate) measures the balance you owe on your credit cards relative to your credit limit. If your credit limit is $10,000 and your current balance is $5,000, your credit utilization is 50 percent. A high utilization ratio shows that you could be overspending, which is why it can damage your score.

To improve your credit utilization ratio, the best thing to do is paying off your debt. And if you have any unused credit cards, keep them open — especially if you’re not paying any annual fees. You can lower your ratio by getting a higher credit limit. There are two easy ways to do this: either by simply asking your credit card provider for a higher limit, or even applying for another card. (However, it’s important to note that this could tempt you to spend even more than you can afford to pay back, wreaking more havoc on your credit score.)

Your payment history and credit utilization ratios are two of the most important factors when calculating your credit score. Together, they make up to 70 percent of your credit score, so keeping these two in check is crucial. It takes time for your credit score to improve — late payments, for example, stay on your credit report for seven years. But the sooner you get started, the better.

With the market for both new cars and used cars ever growing, we are spoilt for choice. Many people, however, have their eyes set on a particular model. Going after your dream car can be an expensive endeavour, but the feeling of driving off the forecourt in your dream car is like no other. Join us to find out how you can afford the car of your dreams without breaking the bank.

Option 1: Credit card

Before going down this route, make sure you speak to your car dealer first as some dealerships do not accept credit card payments.

A benefit of credit card purchases is that your credit card company can give you added protection on the full purchase cost (often as long as the value of the vehicle is over £100 and less than £30,000). Of course, you have to be able to meet your monthly payments too.

If you buy a car in this way, you’ll be allowed to put down an even lower deposit than 10% and pay the remaining money off using a debit card. It’s best to consider all options here, as often the interest that you pay on a credit card could be significantly higher than that of a finance agreement.

Option 2: Hire purchase agreement

This method involves monthly payments with the option to purchase the car at the end of your agreement based on its new value.

The standard deposit to pay when purchasing in this way is 10%, but it is always an option to pay more and have less to pay off later. The rest of the car is then payed off in instalments over a period of one to five years. The longer this period, the less you have to pay each month but due to interest charges, the total cost of the car becomes higher.

Option 3: Personal Contract Purchase agreement

This option is quite similar to opting for a hire purchase agreement. In this scenario, the end value of the car is agreed at the start of the contract, so you can plan your payments accordingly. Payments are often less than what you’d pay in a hire purchase agreement as you pay the full price of the car, plus interest but minus the guaranteed future value of the car. You must pass credit checks before you’re eligible for a PCP agreement.

If you can afford it, it’s a good idea to put down a larger deposit, therefore lessening the amount you have to pay back monthly. Saving a lump sum for a large deposit is easier than saving up for a car, while reduced monthly payments can really help out too. Always evaluate your current monthly payments before you agree to a finance agreement, as being behind on your payments can lead to financial issues.

At the conclusion of your PCP agreement you have two options. You can either pay off the future value of the car to become the full owner, hand back the keys or trade the car in as a deposit for a new finance agreement.

One thing you must be aware of with this agreement is the danger of exceeding the forecasted mileage. If you exceed the mileage on the car, there will be further charges to pay. This is because more miles decrease the value of the car. Also, any damage to the car will be charged to you, so you must be prepared to take good care of the vehicle.

Considering all the options, your dream car isn’t as far out of your grasp as you might have thought. As we can see, there are a range of finance options available to you for purchasing new cars — allowing you to drive that dream car you’ve always wanted without forking out loads of cash. Save up what you can for a significant deposit and always make sure that you can cover the payments before signing any agreements.

A good credit score provides you with so many benefits, such as reasonable interest rates, faster loan approvals, and suitable insurance policies. Nearly 70 million Americans are suffering from bad credit because repairing your credit requires a lot of time and self-control. So, what is the best way to improve your credit score in no time? The answer is simple – buy a tradeline.

But, in order to understand how to improve your credit score by using a tradeline, you need to understand the term “tradeline” first.

What are tradelines?

A tradeline is basically any account appearing on your credit report. A tradeline keeps a record of creditor’s information to calculate his credit report. You can mutually benefit from someone with positive credit history and improve your credit score if he adds you as an authorized user (AU).

Most people ask their family and friends to add them as their AU, but if you want a quick improvement to your credit score, you can add users with exceptional credit history as an authorized user. These AU provide positive data regarding:

• Payment History
• Amount owed
• Length of history

Fair Isaac Corporation (FICO) places a credit score in 5 different grades.

• 720-850 Excellent
• 660-719 Good
• 620-659 Average
• 580-619 Below Average
• 350-579 Poor

Buying 2-3 seasoned tradeline can help you jump to a 720-850 credit score in a month.

What will a tradeline help you achieve?

A tradeline helps you improve your credit score so it will reap all the benefits a good credit score enables you to achieve. Without a good credit score, you will have limited access and services of your credit card, loan plan, and a higher rate of mortgages. In short, you will have to end up paying more money than usual.

But good tradelines on your account will help you achieve a credit score of 750 or higher in no time. When you buy an authorized tradeline from someone like Personal Tradelines, you are added as an AU to one of their credit card accounts, and it takes only 25-30 days to get your credit up to a good score.

Common mistakes people make when buying Tradelines

·         Having no idea of how tradelines work

The most common mistake people do is buy a tradeline without having the slightest idea of how it works. I recommend that you read all about tradelines and their types before actually committing to buying one. You can also get help and information from business tradelines vendors.

·         Buying tradelines in hopes that it will unfreeze their accounts

Tradelines work by adding positive information to your account. If you have fraud alerts or credit freezes on your account, buying a tradeline will not work as new information can’t be posted on your credit report.

·         Understanding the age factor of tradelines

The effectiveness of a tradeline is always going to be relative to how old your own account is and what is in your credit file. For example, if you have a 10-year-old account, an 8-year-old tradeline would not have much impact on it. However, if the account is only 1-2 years old, an 8-year-old tradeline would do wonders in increasing your credit score.

·         Not having an idea of how credit score works

Before buying tradelines, it is vital to know how a credit score impacts your general lifestyle. Because even if you are successful at getting a good credit score after buying tradelines; you will have to follow a particular set of rules to maintain it.

·         Going cheap

Some people go for 4-5 cheap tradelines instead of buying 2-3 seasoned tradelines. It ends up costing you more money, and you are better off buying seasoned or authorized tradelines rather than a lot of cheap tradelines.

Also, a cheap tradeline will not have that much positive effect on your credit report as they don’t have good age. This works against the goal of improving your credit score exponentially.

·         Buying tradelines for shady companies

Unfortunately, there are a lot of companies that are selling tradelines, and it is tough to trust someone random. It is essential to do a background check on a company which includes customer reviews, their ratings, and some money-back guarantee to make that you are getting the best service possible.

But when is it sensible to use a card and when to save? MoneySuperMarket data shows that the usage of credit cards seems to be growing, and have recently conducted a study to identify how much you’ll actually pay on average based on the size of the payments you’re making, the average monthly repayment possible, and the average interest involved as a result.

Alongside the credit card payments, the research highlights how long it would take to make each payment by saving up a monthly average of £352.31 (based on average earnings of £1,827.10 a month, and average expenditure of £1,474.79 a month) – so you can compare whether it’s a better option to save up or to use a card.

Spending and Saving Numbers Crunched

With the average person being able to save around £350 a month, there’s minimal difference in terms of time and total amount spent for a purchase under this amount – whether you’re saving or using a credit card. But the interest does take an effect at higher costs. On a credit card payment of £600, for example, you would on average pay £17 in interest, taking two months to pay it off. At £5,000, the interest reaches up to £931 over 17 months of repayment, against 14.2 months of saving with no interest.

Save for the Suit, Spend on the Commute

The research suggests that while you could save up for a bespoke suit in 2.7 months and save yourself £36 in credit card interest, for a train ticket you might be better off paying on your credit card – as you’ll still have to travel while saving, and the costs of individual tickets is likely to be higher than the £8 you would save in credit card interest.

Can a New Coat Improve Your Credit Rating?

Buying a winter coat on a credit card can be a sensible choice as lower payments that can be paid off immediately, without any interest, will contribute positively to your credit rating.

Even at higher costs, holidays can be a smart choice for a credit card. Despite the average £2,417 spend accruing as much as £208 in interest and taking just over two more months to pay off than to save up, credit cards can provide security on payments, meaning you’re better protected against problems with flights and hotels.

Save for Season Ticket, Spend on the Trainers

More affordable equipment like a mountain bike or sports trainers can be paid off quickly and improve your credit score without accruing any interest, but for a football season ticket, which you can plan to buy well in advance, there’s no significant advantage to buying on card. Instead of paying the additional £27 in interest over three months, you’re better off spending the average £794 after saving up for 2.3 months.

Smarter Smart Phone Buying

A high-end smart phone like the iPhone could cost nearly £50 in interest on a credit card, making saving up the better option. But for a cheap laptop, it might be much lower interest of around £15 or less – and many retailers offer finance options for smart phones and laptops, making it sensible to research your shopping before you buy.

Split the Costs When Getting Together

Weddings are expensive events – so it makes sense to split up the cost as much as possible. Saving up for purchases like the dress and photography, and putting the cheaper payments such as cake and groom’s outfit on credit card, may be the best way to minimise interest payments. Using a card to cover the venue can be helpful as well, as this can protect you against any last minute problems.

Top Tips from MoneySuperMarket

While the study provides some details of smart ways to use your credit cards, some of the top tips include:

• Only make applications for credit cards you think will be accepted or for which you're pre-accepted.
• Use "credit builder credit cards" to improve your credit score.
• Use a cashback card if you're able to pay off your card consistently.

It is essential that you improve your credit score prior to applying for a mortgage in order to boost your chances of getting one.

Here are a few ways that you can bump up your credit rating with the help from Howells Solicitors:

1. Pay Your Monthly Bills on Time

The first, and most obvious, point to make would be to start paying your bills on time, or in advance. This is one of the biggest contributing factors to getting a good credit rating. Paying your bills late will give your bank a reason to tell everyone that you’re not trustworthy enough to lend money to, and therefore bring your score down.

2. Pay Your Phone Bill

Again, not too far away from point one but your monthly phone bill contributes heavily to your credit score. While it may only be £20/30 a month, ensure that there is enough money in your bank to pay this.

Usually, network providers give you a few days’ notice if the payment does not go through as they are aware that there could be a number of contributing factors (closed bank, new bank, fraud, etc.), but you should realistically always leave enough money in your account to pay this by direct debit. The smoother the transaction goes, the higher the rating gets.

3. Use Your Credit Card

If you don’t have a credit card, then it might be worth getting one. If you make small purchases on your credit card and pay them back on time, or before the due date, it shows your bank that you’re reliable and can pay back things on time.

Think of it this way; would you be more likely to lend money to someone that has no history of paying things back, so you have no idea whether you’ll get the money back or not, or more likely to lend money to someone that you know has a great history of paying people back on time?

4. Sign-Up to Credit Updates

You should sign-up to a free credit report checker, such as Experian, which sends you monthly emails. This way, you will be made aware of any changes and can dispute any errors that have been made that reflects your credit in a bad light, however there is no need to run multiple, full credit checks

5. Close Unused Accounts

Closing any unused bank accounts can improve your credit score. If you opened a bank account back in the day, and you haven’t touched it since, then take the money out that is currently in there and close the account. If you have more than one credit card, then you should consolidate the debt on just one.

For further information on whether your credit score will affect your chances of getting a mortgage, or further information on how you can improve your credit score, check out this FAQ Series by Howells Solicitors, or contact the team for guidance using the contact form on their website.

Here Sarah Jackson, Director at Equiniti Credit Services, reveals some surprising stats about millennials’ attitudes to credit and explores with Finance Monthly what it all means for lenders targeting this demographic.

According to Equiniti Credit Service’s latest UK research report ‘A three part harmony: how regulation, data and CX are evolving consumer attitudes to credit’, despite millennial borrowing increasing annually by a healthy 8%, three fifths of this age group will still only consider borrowing from a traditional, well-established lender, or one that they had dealt with before.

That’s weird

Right. Particularly when it’s clear that alternative lending is gaining traction across other age groups and showing strong overall growth of 15% in 2018. The same report revealed that some 62% of all UK consumers would consider alternative sources of credit (I.e. a non-bank, such as a retailer or car finance provider) the next time they apply for a loan. While consideration does not equal action, the figures about take-up also support the trend: over a quarter of consumers who borrowed over £1000 in the last year did, in fact, use an alternative lender over a traditional high street bank.

If both millennial borrowing and alternative lending are on the up, why is there a disconnect between the two?

So, while non-traditional lenders are not yet competing with banks in loan volumes, they have certainly established themselves within the market. Which begs a question: if both millennial borrowing and alternative lending are on the up, why is there a disconnect between the two?

Customer inexperience

The story, as usual, lies in the data. Although 70% of UK consumers are comfortable completing loan application processes digitally, this figure drops to 57% for millennials specifically. Considering this age group’s well documented digital literacy, this can only be chalked up to financial inexperience. Older generations have not only had more time to become comfortable with the credit processes involved with a loan application, but most have also had more opportunity. External factors play a big part here too. House prices are such that for many millennials, unlike previous generations, the prospect of buying a house and applying for a mortgage at a relatively young age doesn’t even feature on the radar. As such, this group has less exposure to credit processes.

Financial inexperience creates a need for more careful guidance and reassurance. This likely explains why over half (58%) of millennials would only consider borrowing from well-known or previously used lenders.

A helping hand

For lenders, this is both a problem and a huge opportunity. With many millennials now in their mid-thirties, their collective buying power is set to increase substantially over the next decade, making this an increasingly lucrative target market.

That this knowledge gap exists is a chance for the smartest non-traditional credit providers to differentiate themselves as genuine and credible sources of information and guidance for these nervy borrowers.

A great user experience (UX) will undoubtedly help, but will need to be far more than a facility for fast and convenient access to credit.

A great user experience (UX) will undoubtedly help, but will need to be far more than a facility for fast and convenient access to credit. This notion is given further weight by the same report which indicates that one in seven applicants cite clarity of the product’s documentation as the most important factor when deciding between lenders. Persuasive and confidence inspiring UX goes far beyond origination – it must resonate throughout the entire loan lifecycle.

To successfully target millennials, this means balancing investment in a slick digital user interface and the development of clear and simple documentation. Since this group values one-to-one guidance, the contact centre will be a key battleground for business. Here, engaging a specialist outsourcing partner may well be the way to go. These providers are trained and skilled in supporting the kind of dialogue that younger generations need to confidently apply for credit.