UK consumer credit market is hoping to see that consumers will reduce their debts coming 2016.
Because of the gradual and continuous growth over the best part of the decade, the UK consumer credit market ceased to be a growth industry. Per household the outstanding unsecured borrowings went down by more than £500 over the last year.
In 2011 borrowing was set to contract per household by a further £200 or 2-3% while consumers keep repaying their debts and the reserve of credit remains limited. Because of the historical importance of consumption fueled by debt to the UK economy, this continuous shortening may hinder retail sales and could be an obstacle on economical growth.
The government of the UK should start buying homes to help citizens reduce debt and start increasing spending. This is according to the RBS (Royal Bank of Scotland). This proposal is targeting homeowners who are not spending because their property’s value is smaller than the value of their mortgage and they don’t have any equity in their homes. If the number of people who have mortgage is large enough, coupled with those who have unsecured debt, this leads to a part of the population that is currently unwilling to increase the spending in their homes.
If you have bad marks on your credit report these can be attributed to one of three factors. First of all there are errors which should be corrected. These are mostly the bank’s fault and they should be discussed with bank representatives. The there could be old payments which you paid late and these are reported in the transaction history. And finally, bad marks on credit reports can also be attributed to debts gone bad. This meaning you haven’t paid them yet. In this case you should do everything in your power to pay them back or at least renegotiate with the bank to settle at a lower amount.
The biggest trouble will be figuring out to whom to pay these debts. Some of them may have already been handed over to collection agencies which in turn will ask for collection fees and even double the amount you owe.
You might have a debt problem and you don’t even realise it. Overdrafts are not regarded by many as debts, although they should be. Credit cards and loans are harder to come by and people started digging deeper and deeper into their overdrafts. As a short-term solution this can be convenient, but it can escalate faster than you could imagine. There were 58,069 debt overdrafts in 2007, 134,540 in 2011. So far, 2012 has about 69,663 overdaft debts, partly because credit is becoming hard to come by.
You should start monitoring your finances. Overdrafts are not taken seriously because most people think they can cover them month by month, once their payment from work starts rolling in. The problem is the next month you’ll be in the red again, spending money you don’t own.
Some people ask themselves if having a log-term debt that they can afford actually improves their credit score. You have finished school and have a relatively small debt in student loans and maybe an even smaller sum in credit card debt. You want a new car and you take out a larger amount of money that further contributes to this debt. Is this something to improve your credit score if in the future you’re looking towards an eventual mortgage? Is this going to improve your credit score?
MSN Money’s Liz Weston thinks the answer is usually “no”. Answering a reader posing this question she states that you don’t need to balance on your active credit card that you’re currently using in order to help your credit.
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The banks and credit card companies would much rather deal with someone who is willing to pay something towards their debts rather than people who choose to totally ignore the problem and pay nothing.
If you are finding it difficult to meet your repayments each month then an arrangement must be made with your lenders to bring your payments to a level you can realistically afford.
The amount of repossessions have risen dramatically this year in Great Britain according to various surveys, they also say it is likely that the repossessions will continue for at least the next two years. The repossession are not just limited to people’s homes but include vehicles and personal purchases made on finance.
If you are struggling to pay your bills and debt repayments each month you may want to consider a debt management plan. There are quite a few debt management companies around licensed by the Office of Fair Trading. These companies will discuss your problems with you, take a statement of income and expenditure to find out how much you would be paying each month towards your debts if you decide to go with the debt management programme.
Debts of the nation
The main source of debt in Ireland appears to be coming from personal debt. Credit is too easy to get and people are living way outside of their means. The only way the government sees to remedy this issue is to stop making credit so available to anyone who wants it. It is really a big enough issue that getting it under control can help them with their current financial crisis. Over thirty thousand people have houses they can’t pay for and have a hard time putting food on the table because they are in so much debt. So unlike lots of countries at the moment the problem in Ireland is not the government borrowing too much money, but everyone else. Mortgage and credit card debt is the highest it has ever been.
The Nation’s Debts
The Government’s plan to deal with the personal debt levels was revealed by Alan Shatter and Michael Noonan last month in the Dublin city centre room. The personal debt crisis is what sets Ireland apart in this financial crisis and Noonan announced that the Government is now putting in place a legal basis to deal with the personal debt. They are already dealing with the sovereign debt and the banking debt, but this is the introduction of a reform of insolvency law of proportions unseen since the foundation of the State.
Government Borrowing in the UK is Down
In January Britain’s government received more money than it borrowed for that month. This is good news despite the one trillion in debt that is still left to be paid. Receiving more money than they borrowed meant they were able to get ahead. You cannot get ahead if the government is constantly borrowing more to cover expenses. There had been some doubts because people were losing faith in the economy, but this latest news gives those same people hope. It is no secret that the government borrowing money can harm the economy, and the debt that is owed by the UK is in the trillions.