How-To-Find-Out-How-Much-Debt-You-Have-Care-About-Money

How To Find Out How Much Debt You Have

Do you have a feeling that your debts are building up but you’re not quite sure by how much? Or do you have several store cards or multiple credit cards and you’ve lost track of how much is on them? Perhaps you have moved and haven’t heard from your creditors in a while.  There’s an easy way to find out how much debt you have.

  • How Do I Find Out
  • What Is A Credit Score
  • What Are The Benefits Of Checking Your Report
  • How To Check Your Credit Report
  • What To Do Next
  • How To Improve your Credit Score
  • Conclusion

How Do I Find Out?

Most of us get into some sort of debt at some point, but if the debts start to become unmanageable, it can get overwhelming. To deal with your debt, the first thing to do is find out how much money you owe and who you owe it to.  If you aren’t sure how much you owe to who or think you have forgotten about some of your debts then checking your credit file is a simple  step to checking how much you owe. Remember that you may also have some debts which aren’t reported to the credit reference agencies such are council tax, benefit over payments and some pay day loans.

A credit file is also known as your credit history. This will include information about you such as the credit you’ve taken out and how you manage repayments. It will also include any court action taken against you in respect of your debts in the past or currently, as well as your financial status, such as if you are or have been bankrupt for example.

Your credit file is a mix of information from lenders, banks and other relevant public information. In the UK, there are three credit reference agencies you can use:

  • Experian
  • Equifax
  • TransUnion (formerly Callcredit)

What Is A Credit Score

Your credit score is a three digit number on your file which lenders use to determine if you’re likely to repay them when they loan you money.  Having a low credit score means there is a much bigger risk in lending you money and some lenders may refuse your request altogether.  Whereas with a high or good credit score there is less risk to your lender who can see that you manage repayments well and there is less chance of you defaulting on a loan.

What Are The Benefits Of Checking Your Report

Now you know what a credit report is, you can check your file using one of the agencies above. There are two benefits from checking your report. 

Firstly, you can find out how much debt you have.  The credit file includes information about who you owe money to and how much, so you can get a clear overview of your debts.  

Secondly, you can spot any errors in your report. Perhaps you have discharged your debts, but there are still some on your file.  Or maybe you have been discharged from bankruptcy but your status hasn’t changed. Maybe there are some basic details wrong, such as a change of name or change of address. 

Essentially, your report is your personal financial history, so it’s worth checking and keeping it accurate. 

How To Check Your Credit Report

You can sign up online to view your credit report through any of the credit reference agencies and some third party companies. Take care to read the terms and conditions, for example you may be offered free access for the first 30 days but will incur a monthly fee if you don’t then cancel the agreement. 

After you send your details, you should receive a clear overview of how much you owe across all your credit cards, loans and mortgages and a break down for each account. .

Moreover, if you do find any incorrect information, you can contact the credit reference agency and request that they change the details. 

What To Do Next

Now you have the information about your debt, it could be news you weren’t expecting.  At this point, if you owe more money than you can manage to repay, you may need to speak to a debt adviser. This is a good idea especially if you owe money to multiple creditors and they are chasing you for payments.  If you have a poor credit score, perhaps this is just becoming more overwhelming.

However, you can speak to a debt adviser for free through a charity such as StepChange.org or the National Debt Advice Line.  They can help you to find a debt solution which suits your situation. 

Remember, it’s always better to speak to a debt adviser sooner rather than later, particularly if you’re struggling with payments. 

How To Improve Your Credit Score

Perhaps your credit score is fair, but you want to apply for a mortgage one day so you’re looking to improve it. Here are some easy ways to do so.

  • Always pay your credit card debts and loans on time. The way you manage your day to day finances makes a big difference to the overall picture of your credit history. In the past, perhaps you delayed payments for whatever reason. From now, try to always make them on time and your credit score will improve. 
  • Don’t go over your agreed credit limit. If you exceed your agreed borrowing limit too many times, this could make it hard to apply for loans in the future. 
  • Try your best never to miss a payment. Sometimes circumstances change in life, and you may find yourself facing financial difficulties. However, try to pay as much as you can, rather than ignore it and pay nothing at all, if you can’t pay the full amount contact the lender.  This should help stop you from falling too far behind with your debt repayments. Don’t forget, you can speak to your creditors if you are facing sudden financial difficulty. 

Conclusion

To sum up, it’s very easy to find out how much debt you owe and it’s also free. Contact a credit reference agency today and you can start to put your debts into order.  Remember, if you can clearly see that your debts are becoming unmanageable, then speak to a debt adviser for free, as soon as possible.