Managing your finances can be tricky, especially when you have been dipping into your overdraft or relying on a credit card.
Pearl Akintola, consumer finance expert at Experian, is here you get your spending back on track…
• To see more please visit: experian.co.uk
1. When managing debt across different bank accounts, where is best to start?
A method called ‘the debt avalanche method’ is a good way to pay down debt. It works by getting rid of your balance with the highest interest rate first.
You can follow these easy steps:
METHOD:
1. First make a list of all your debts and where they are located.
2. Then rank your debts by interest rate, putting those with the highest rates first.
3. Focus on paying off those first. If possible, pay more than the minimum payment as this will help to clear the balance faster.
4. Make sure you keep up with the minimum payments on all your other debts – otherwise you’ll be charged late fees.
5. Once the first balance has been cleared, move onto the next debt and repeat the steps above.
2. Will my credit score be affected forever after getting into a lot of debt?
The short answer is no.
If you are able to keep up with your debt repayments monthly, your credit score will likely improve over time.
3. Will my debt get so old that I won’t have to pay it?
There is a statute of limitations on most debt, after which creditors may not be able to pursue legal
