Five tips for a financially healthy 2016

A new year brings new opportunities, a fresh start and a time for people to get financially organised. 

For those with mortgages and loans, a potential rise in interest rates could further squeeze household budgets by pushing up monthly payments. The expected rise could also affect those searching for a loan to pay for a special purchase in the year ahead, be it a summer wedding, a new car or a home. 

Whatever the situation, it is never  too late to get organised.  The start of the year is a good opportunity to look at your spending and credit score in preparation for 2016.  

1. Break up with your partner – Wait! There is no need to ditch your loved one, but if your partner has a poor credit history you should keep your credit accounts and bills separate to prevent financial linking. Although sharing a bank account with your live-in partner is an exciting step in any relationship, consider both your scores before joining any financial products. These seemingly small decisions can have a knock-on effect on your credit. 

2. Stay loyal – With bills ranging from long-term commitments such as mortgages to temporary memberships like Netflix and spinning classes, your outgoings can become confusing. Staying loyal to banks can improve you credit score over time, and if you have not done so already, set up direct debits to pay your bills on dates that suit your payday. The more controlled your finances are, the more you increase your chances of never missing a payment, which could also negatively impact your score. Evidence of stability, such as time with an employer or time at your address, will also have a positive effect, so the less you move around, the better.

3. Beware of financial window shopping – Too many ‘hard’ loan searches online can have a negative impact on your credit score. Be cautious: many of the attractive headline loan products are not available to everyone. Shopping around and applying for various enticing loan deals could actually harm your overall chances of getting a loan by leaving a hard credit footprint which will damage your score if you are rejected. The alternative is to use ‘soft’ search sites which compare a wide range of loan products matched to your individual circumstances, without the risk of affecting any future applications.

4. Register to vote – Whatever your political preference, if you are not on the electoral roll, you will have great difficulty getting any mainstream credit. The electoral roll helps lenders establish your identity as well as demonstrating stability. 

5. Get connected –The number of people using landlines in 2016 has started to dwindle. However, having a fixed line connected or even a mobile phone contract under your name can increase your credit score with many lenders. In some cases, you may not be able to register for products online if you don’t. Also, with so much of our personal financial details now stored on banking apps and websites, having a landline or monthly mobile contract can play a vital role in fraud prevention. 

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