Get Smart About Credit Day
I started Broke Girl in the City as a way to share top tips on how to lead a fabulous lifestyle in the city when broke. Ever since I left for University, I have been in debt. My credit score was at rock bottom last year. Yet I have managed to turn it around in less than 12 months. Being smart about credit is actually one of the most important things to do, and yet we rarely educate ourselves about how to improve our finances.
UK in the midst of a credit crisis
The Guardian reported this year that the UK’s £200bn consumer credit was unsustainable and that a cash-stripped society was in debt more than ever before.
According to the latest figures published by the Money Charity, the total value of outstanding personal debt in the UK has reached £1.576 trillion
Get Smart About Credit Day encourages you to take control of this very important aspect of your life and learn how to manage credit properly. There will come a day when it may be incredibly important that you maintain a decent credit score. Maybe you are struggling right now with credit card debt and can’t see the light at the end of the tunnel. You can do this. If I can, you definitely can. Being in debt can also cause long-term emotional stress, so we it owe it to ourselves to Get Smart About Credit.
History of Get Smart About Credit Day
Get Smart About Credit Day was established by the ABA (American Bankers Association) to help encourage young people to get a handle on their credit from the start. I don’t know about you, but I had no education about finances at school. My mother told me never to get into debt. However, if you are destined for University, it means having to take out various loans. Debt seems to be an integral part of life from when we leave home.
It is important that we educate people in schools about how to properly manage personal finances. However, there is so much more that many of us can be doing for ourselves – at any age. We owe it to ourselves to be more savvy about our personal finances and master credit so it doesn’t have a detrimental effect on our lives.
Get Smart About Credit Day is an annual event held on the third Thursday in October, where bankers visit local classrooms to share with students the “credit facts of life.”
Make Get Smart About Credit Day your opportunity to learn how to manage credit and not let it manage you.
Get Smart About Credit Day is a great opportunity to begin looking after your financial circumstances by looking at your credit. I finally paid off a 25k loan this year. Reduced my credit card debt overall, which drastically improved my credit rating. Focus on doing one thing today rather than feeling overwhelmed by your finances.
How to celebrate Get Smart About Credit Day
I wrote an article about how I started saving £25 a week, which has to be the best advice I have ever given myself. When I started a new job this year, I had an emergency fund saved to get me through that first month at work. However, once I had spent it, I didn’t restart the savings programme. So I am setting aside time today to put this back in place and look at more long-term savings plans rather than relying on credit.
10 ways to improve your credit score
To summarise, a higher credit score means companies see you as a lower risk, so you’re more likely to be approved for credit. A high score indicates you have a history of managing your credit sensibly and making repayments on time. If you have a low credit score, you can change this over time. Check out our 10 ways to improve your Credit Score below.
Trap of paying minimum interest
Personal lending and credit cards have seen a dramatic rise this year. However, don’t get into the trap of maxing out your credit cards and then only paying the minimum interest. Believe me, I have done the very same thing, and it takes a very long time to break this cycle. It’s a very expensive way of mismanaging credit. The only way I did it was to pay off my loan and then start chipping away at one card at a time. Only then could I start overpaying another. It takes time to get out of debt once in debt, so managing your credit is key.
Join MoneySavingExpert Club for free
Another great tip: I joined the MoneySavingExpert club, which monitors my credit rating on a monthly basis. Not only do I get this for free, but I have also managed to change my credit rating. It went from the worst it could be to very good within less than a year. Just by managing my credit better.
Payday Loans
In August 2018, the super giant of payday loans, Wonga, fell into administration. MoneySavingExpert’s Martin Lewis had been warning off people for many years. To many people who felt they couldn’t get credit through any other route to cover last-minute expenses or get through a shortfall, these payday loans felt like a godsend. However, the interest was just phenomenal. In 2012, a £1,000 payday loan needed to be paid back the following month with £1,312.94.
Under a wave of customer compensation claims, their business model was threatened by their interest rates being capped by Ministers, and despite a cash injection of 10m by investors, Wonga finally went under. If you have a loan with Wonga, you will still need to pay it back, but they are no longer accepting new applications.
Money Mondays
I wrote a series of ‘Money Monday’ articles, which tackled debt, credit, as well as the emotional stress that comes with it.
Click on any of the buttons below to continue to read more Money Monday articles.
Managing personal debt might seem overwhelming, so I have written a guide on how best to manage your debt.
Having money problems can cause significant emotional stress. Read our top tips on how best to cope.
