THERE is no question that many people struggle with debt, but that does not mean there is nothing you can do about it. You just need to get serious about getting out of debt.
TransUnion gave SunMoney some tips on fixing debt. A TransUnion survey found that 33% of people have never checked their credit report, which is the first step in correcting your financial problems.
Senior director at TransUnion, Garnet Jensen, gave the following guidelines for managing credit to maximise financial health.
Know where you stand
A credit report is a detailed record of how you manage your money. Get your credit report online from transunion.co.za
To build and maintain a healthy credit score, you must pay your bills on time and in full each month. Payment behaviour, enquiries, negative listings and the total debt to credit ratio are also foundational to overall financial health.
Check your report carefully
It’s important to check your credit report every six to 12 months to make sure the information is accurate and up to date. Regular monitoring can help reduce the risk of identity theft, but it’s important to keep in mind that not all creditors report to the same bureaus.
Write down your responsibilities
Use your credit report to make a list of all your active accounts and analyse your monthly spend in each.
Once you have your accounts, write down your monthly income and payment responsibilities, including food and transport costs.
Compare your income and your spend
Look closely at your income against your monthly expenditure to see if you can save at least 10% of your spend.
Don’t waste your savings
If you manage to cut down your spending, make a conscious effort to put it towards paying off any debt. Late payments can have negative credit score impact, so it’s important to pay your debt on time and in full every month.
Pay priority debt first
Pay off any debt with high interest rates first. Priority should be on credit accounts, debt that is close to being paid off or those with high annual fees.
Organise your payment dates
Create a payment calendar or set smartphone alerts to make sure you never miss a payment. Include due dates and payment amounts of every account to make sure you know what to pay for, when and where.
