The normal British family spends up to a staggering £35,001 on Christmas over a lifetime, according to an analysis from ClearScore and economists, Cebr. Every year a considerable amount of families turn to credit to make up for the shortfall for their Christmas spending. It is so common to borrow that now one in six families lend up to £700 every year to pay for their festive expenses.
In your interest
Christmas can be noticeably more expensive for some families. Those families that borrow £700 each year with a poor credit score possibly will pay over £3000 in interest in addition to their original debt over a lifetime. An excellent score reduces the interest paid by 46% to £1,7664. This is due to the best rates on credit cards being reserved by lenders for lower risk borrowers. When you check your credit score on a regular basis you can keep track of your credit rating.
It is more important than ever to find credit at the best achievable rate. Previous consumer credit, including loans on credit cards as well as other loans, will be factored into the interest rate that you are offered.
Before borrowing any money it is important to consider what happens after Christmas. The UK economy will be facing a challenging time in 2017 and often rising unemployment can rapidly lead to families defaulting on paying back loans. If as a family you have had the finance to help with Christmas; paying off the loan as speedily as possible will help you to keep your interest repayments low.
Actively manage your credit
You can sign up online to see your credit score for free. A credit report from ClearScore allows you to track your progress using a timeline. Look carefully at your report and always check it out before applying for credit.
Ensure that any credit providers have all of your personal details right such as your correct address and bank details. Make certain that you are registered properly on the electoral roll as it is a simple way of boosting your credit score. When it is your name on utility bills and accounts, this will also impact on your credit. The more evidence you have that you regularly borrow and repay your credit on time, the healthier your credit score looks.
A good tip to increase your score for next Christmas is to use a smaller percentage of your overall available credit limit – a smaller more affordable amount of borrowing at a time makes it easy to manage your debts.
Disclosure: This is a collaborative post