With household bills rising in ‘Awful April’, many people will be looking to reduce the amount they pay for essentials, as well as reducing their debts where possible.
Data from Equifax UK reveals a trend of climbing debt, with outstanding UK credit card debt levels reaching £71.2bn in December 2024 – a 5.6% year-on-year increase. The credit reference agency has warned that rising credit card debt can also be a sign of mounting financial pressures.
Craig Tebbutt, chief strategy and innovation officer at Equifax UK, said: “Overspending, mounting debt and, crucially, missing repayments can leave a lasting impression on your credit score – but the good news is this doesn’t have to be permanent.
“It is never too late to start turning things around, and while improving your credit score won’t happen overnight, proactively organising your financial life is a good place to start and can help pave the way for a healthier financial future. That’s why this spring, we’re encouraging consumers to review their finances and take control of their credit health.”
Top tips to spring clean your finances
Look back before looking forward
How life insurance can benefit your health and wellbeing over the decades
Sponsored by Post Office
Collect your bills, bank statements, and receipts and review them to identify areas of unnecessary spending.
Keep an eye on your credit report
Review your credit report to ensure your personal information is up to date and accurate. If you do come across a mistake, you can rectify it by submitting a ‘notice of correction’ to the credit reference agency.
Get on the electoral roll
This gives lenders proof of your name and address, allowing them to verify your identity and lend with confidence.
Build a credit history
Your credit history can show how you have managed your money in the past and may be used as a basis for how you will do so in the future. Building your credit history can start with a simple mobile phone contract or having your name on a utility bill.
Make payments on time
Missed or late payments can stay on your credit record for six years or more. Whether you are paying off a mortgage, credit card bill, or a buy now, pay later (BNPL) transaction, ensure your repayments are consistent and punctual.
Limit your credit applications
Credit applications leave a ‘footprint’ on your credit report. Too many in a short period of time could negatively affect your score.
Close unused accounts
When assessing a credit application, lenders may look at how much unutilised credit is available to you. It is always best practice to close accounts you are no longer using, particularly if they are joint accounts, as the other party’s credit habits may negatively impact yours.
