Tips for Managing Money
Get an accurate picture of your finances – assets; debts; income; expenses – can you afford extra credit? More borrowing may put your assets such as a house or car at risk.
Resist the ‘Buy Now – Pay Later’ hard sell – if you buy on credit, that mobile phone, latest fashion, DVD player, or car is likely to cost you double – could be ‘Buy Now – Pay Forever’! Ask yourself “Do I really need it?”
Don’t assume that because creditors will lend you money, they know you can afford it – their assessment processes can be very poor.
Be careful of offers to automatically increase the limit on your credit card – you may just be getting into deeper debt trouble. Don’t get a loan to pay out your credit cards and just run them up again.
Credit card debt is expensive – if you only paid the minimum monthly payment and borrowed nothing more, your current debt could take you over 20 years to pay off.
Don’t sign up for anything you don’t fully understand whether it’s a mobile phone, a credit card, insurance or a refinance of your mortgage – ask questions until you do understand – take a day to think about it – take the contract away with you – get independent advice.
If you are going to buy on credit, shop around for the best deal for the credit just as you would for the goods. Credit offered at stores and car dealers usually has a higher interest rate.
If it sounds too good to be true it probably is! 12 months interest free – No payments for 2 years – Pay off your home loan in 5 years – there’s likely to be a sting in the tail – they want to sell you the product but they won’t tell you what’s in the fine print.
If you are unsure about what may be on your credit record, you can obtain a free copy. The main credit record/rating agencies in Australia are private companies called Veda Advantage and Dun and Bradstreet.
To get a free copy of your credit report from Veda Advantage within 2 weeks, write to them at:
PO Box 964
North Sydney NSW 2059
You will need to include in the letter your full name, date of birth, driver’s licence number, current address and previous address (if you’ve moved in the last 5 years), employment details, the name of the organisation to which you last applied for credit and identification documents.
If you are willing to pay a fee (over $50) to get the report within 24 hours, you can apply and pay online at: www.mycreditfile.com.au/
To get a free copy of your credit report from Dun and Bradstreet in 10 business days, go to www.dnb.com.au
or call Dun and Bradstreet on 132 333.
If you believe that anything on your credit report is not accurate or up-to-date, you can request that Veda Advantage and/or Dun and Bradstreet amend the report. If you want to add an explanation where the report can’t be amended, you can send a 150 word letter or statement and ask for this to be added to your report.
By applying for a copy of your credit report or applying for credit, the information you provide may be used to update your credit record. This may mean that creditors who did not know your current address may start to chase you again.
If you are in trouble with debt – seek help – see a free financial counselling service. Confront your fears – what’s the worst that can happen – it may not be as bad as you fear!