Looking to get a handle on your credit? From understanding exactly what it is, to applying for it, keeping up with payments and making sure you're in a good standing… we're breaking it all down for you in 5.
Credit is getting access to money, either through a cash loan or a store card (hey, Mr Price Money), or credit card to buy what you need and then pay it back over a certain period of time. The cash or product is available to you right away and must then be repaid in the future. The important thing to remember here, is that the credit you get given must always be repaid. If you don't pay it back, it will negatively affect your credit record and make it really difficult to get credit again in the future, but more about that later!
It's very easy to get caught up applying for credit. The most important thing to remember is that there must be a real need for credit, and you must be able to afford the repayments. By applying for lots of credit, you risk of becoming "over indebted". This means you've got yourself in too much debt and can't afford to pay the monthly instalments on your credit facility. This will also result in your credit score being affected.
Having access to credit is a good thing, it just must be managed wisely. This means that you only take on credit if you can afford it and are able to pay the instalment due every month. To do this, you need to have a basic monthly budget showing your income, and your expenses. There must be enough money left over to pay your debt. Do this, and it will help make sure you keep a a good credit score and a good credit rating.
Life is full of twists! And sometimes, due to certain circumstances and things get out of our control, a monthly instalment is either missed or not paid. If this ever happens, it is important to make up for the missed instalment in the following month by paying two instalments. If you're not able to do this, get in touch with the company where you have credit and explain your situation. You can reach an agreement together and go from there. If the company tries to contact you, the best thing you can do is respond and let them know where you're at. Most companies are more understanding if you communicate and keep them up to date.
And don't forget, if you're ever struggling to pay your Mr Price Money account, give us a call for help on 0800 547 843.
Just as you care for your physical and mental health, the same goes for your credit health. It's important to check your credit report at least twice a year. There are lots of credit bureaus that offer one free credit report a year. By checking your credit report, you'll make sure that your credit report held by the credit bureau is accurate and it also let's you check your credit score.
Wanna check yours? Click here for a list of bureaus you can contact.
Stay healthy, fam!