Consolidating your Finances

As a nation, we’re getting more and more in debt each year, and some of these debts can come with hefty interest rates and fees. So it is easy to see how our finances can quickly and easily spiral out of control. I’m not a financial expert but I wanted to just put a few ideas out there to anyone who struggles with debts and would like to take some control back.

How Do You Take Control?

Well, you start off by doing your research, it shouldn’t take too long but it will give you a better picture of where you stand. Even if it looks awful once you see it all on paper, don’t panic, you knew it wasn’t great and you are making positive steps to change it. So,

Number one, do a thorough income and outgoings list. These lists need to include EVERYTHING there is no point in conning yourself into thinking you have more that you do, it will set you up to fail.

Number two, check your credit score. Your credit report will provide you with a score. The score gives you an indication of how your finances compare to others in your areas and of how financial organisations may categorise you if they were to do a search for you. It also provides you with a list of all the financial organisations you are connected to, who you have debts with, what your defaults look like and your total amount of outstanding debt.

Now you know where you stand, you can start the improvements.

Creating Your Own Plan.

Now you have had site of your financial position as a whole, make use of your free credit report by using it to assess what action to take first. If you want to increase your credit score slightly then making simple changes like ensuring you are on the electoral roll, contacting companies and closing old accounts and disputing any discrepancies on your report can all help boost your score. However, if you really need to put a consolidation plan in place here’s some tips on where to start:

Balance transfer credit cards: If you are racking up more debt, not by spending but by accruing a load of interest and you have a good credit rating, it might be a good idea to consider a 0% balance transfer credit card. This will allow you to consolidate your credit card debts onto one credit card of which you will pay 0% interest for a fixed period of time. Two things to be very careful of here, one is that you must remember to ensure you switch to another 0% card prior to the end of the fixed period (if the debt is not already paid off) and two is that in order for it to work as debt consolidation and actually minimise your debts, you have to keep paying the full amounts off. If you get tempted to make minimal reduced monthly payments all you will be doing is extending the length of time you have your debt.

Mortgages: For most people a mortgage will be the largest most imposing debt they will ever have but because it is a long term debt, quite often we just allow the banks to make changes to the terms of the agreements, shift our mortgages and we allow ourselves to leave it sat there in the background unaware of how much interest is being accrued. How much of our hard earned cash is really being paid into buying our home and how much is going on interest? If you don’t already know, now is the time to check and then shop around, you never know, it might be time to move from our ‘trusty’ local bank to one that can offer us a much better deal and ultimately make quite a dint in one of our biggest debts!

Low interest loans: If you have credit cards appearing on your credit report it’s important that you find out the interest rate being charged if you do not already know. The company contact details will likely be on your report if you don’t already have them, so you can always call to check if you don’t have all your original documentation. If you find that the credit cards have particularly high interest rates, it may be worth looking into getting a low interest loan to consolidate the amount of debt racked up on the cards as loans have a set payment plan it’ll also be much easier to manage than your cards.

To consolidate expensive credit cards

Talk to the companies: Armed with your income and expenditure call the debt collection companies. Ask them about making minimum payments and ask them their advice on any further deals they may be able to offer you. Occasionally and especially for long standing debt, collection agencies will take a slight hit on the amount of return from you by accepting a full and final settlement, it won’t always be on offer and you have to be careful about the detrimental effect on your credit rating but it is worth asking those chasing the debts for potential options for settlement, you might be surprised at how helpful they will be if they think they can wipe your debts from their books sooner rather than later.

Not Comfortable Going It Alone?

If you are considering using a debt management company then do your research first, make sure they are reputable, make sure you have a good idea of the consequences (ie effect on your credit rating) of any plans they suggest, and make sure you have a good understanding of the fees the company will charge. The clip below will start you off thinking about how debt management companies work so you can expand your research to make sure it is the correct choice for you.

 

Background Checks in More Detail

In the article on Proper Preparation & Planning! (PP&P) I touched on a few of the background checks potential employers could carry out as part of the recruitment process. I know that the thought of some of these checks can be a little daunting for job hunters so I thought it was important to also take a peek at some of them in a little bit more depth, expand our knowledge of them so they don’t take us by surprise and see if there is anything we can do to see ourselves through the eyes of the recruiter. If we can see ourselves in their eyes before we begin the recruitment process then we give ourselves the opportunity to make any possible tweaks and adjustments so that we can boost our personal brand rather than taint it through the checking process.

I’m not going to discuss the Right To Work check as I know we covered pretty much everything in the PP&P article, but just a reminder that it’s handy to make sure you have access to 2 or 3 of the documents on the accepted evidence list in advance as it is just one less thing for you to think about before interviews and meeting new employers. But let’s take a look into; references, background checks inc credit history reports, criminal record, qualification and health checks. Why, when, how might a recruiter carry these out and is there anything you can do to enhance the results before the recruiter gets them?

References:

Potential new employers will ask for references in order to back up the information you provide in your CV and in order to gain an overall image of the type of employee you might be. They are likely to your referees quite basic information, i.e start and end date, amount of days of sick leave.  In fact, some companies limit the amount of information they will give as a referee solely to the stats and refuse to embellish further as part of their policies. However character references can also be highly valued and some recruiters may specify that they would like both an employee and a character reference. You can ensure that your references come back squeaky clean by ensuring that you get the facts correct on your CV, don’t embellish and don’t get key dates wrong. You can also select your referees wisely. A recruiter will expect referees to be a; former employer (ideally line manager/mentor) or a character reference to be someone who has a professional title and has known you over two years but is not a close friend or relative. So once you have whittled the list down using that criteria, consider people who; you have recently worked closely with, who have gone out of their way to give positive feedback in the past and that know enough about you to demonstrate that you have the suitable positive traits to get on in your new potential role. It doesn’t harm to ask your selected referees beforehand if they would be happy to do this as it may stop you making a mistake in your selection and it will also give them time to prep a positive and sympathetic reference rather than being on the spot.

Background Checks:

It’s unlikely these will be requested until you’re at the final stages of the recruitment process, it’s a good sign, it means they think you are worth the time and close to landing that new role! And, due to data protection regulations you’ll always be made aware/asked that the checks are to be carried out. To make sure the results of these checks don’t make the employer think twice, it is a good idea to make sure you try to get everything in as much order as possible right at the beginning of your job search.

Credit report checks are sometimes carried out as part of the character checks, however it is more likely that this kind of check will be carried out if you are looking for work within the financial sector. You can sign up to companies like My Credit Monitor to get a look at your report. If you do this at the beginning of your job search it might buy you enough time to add explanations to any blemishes or even have some of them removed if there are any inaccuracies.

Criminal record checks won’t be carried out by all employers. Although some employers may choose to do a criminal record check as part of the character assessment, it is not usual practice. However, an application to the Disclosure Barring Service (DBS) will be a certainty in any profession where you will be working with children, vulnerable adults or usually in health services. It is best to be open and honest during the recruitment process as if there is something on your criminal record, especially something considered a ‘minor offense’ (such as a speeding penalty perhaps) it is more likely a recruiter will try to work around it if it does not come to a surprise to them at the end of the process.

Other Checks:

It’s quite possible that recruiters will check your qualifications to ensure that you have not embellished your CV so in short, don’t. But if you are applying for a roll that requires specific qualifications for health and safety reasons you can be absolutely sure the recruitment process will include validating these. In fact, if a company recruits a person for a roll and neglects to do such checks, and that person causes a fatal accident (for example a bus driver who’s license has not been validated) the company could actually be accused of corporate manslaughter. Best practice for a candidate is to ensure they have any such qualifications available and ready to be produced for validation during the process.

Health checks may be carried out to ensure suitability for a role, this is usually only likely to happen if health conditions cause health and safety issues and it is made absolutely clear to employers that health checks cannot be used as a means of discrimination, i.e targeting them at only a specific age group. If you are going for a role operating heavy machinery, driving etc then it wouldn’t hurt to ensure your eye sight and other health is checked if you are in any doubt about them.