Debt Advice And Debt Myths

"All debt is bad debt" is not necessarily true. Debts such as mortgages, car loans and overdrafts can be deemed as necessary. Mortgages are often a cheaper option than renting, it is also usually an investment in the future. Setting up an overdraft can be useful in order to avoid missed direct debits and standing orders, and to avoid the penalty charges that will accrue if this happens.

Some people assume that a Bad Credit Rating is for life. This is one of the many common debt myths surrounding credit references is that bad credit ratings are with you for life. Bad credit records have a limited life span on your personal credit file, usually around six years. There are many ways to rebuild your credit rating, and you can have a spotless credit record within a very short space of time.

If you have Bad Credit you cannot borrow - not always true! Bad credit will usually mean that you will not get offered the low interest rates that people with good credit ratings can receive. Lenders will look at your credit rating and use the information to decide if you are a good lending risk or not. In most cases a poor credit reference with regards to credit card defaults will not hamper your chances of gaining a mortgage. Taking on high interest debts such as store credit cards, and then making prompt repayments, and more than the minimum payments, can see your credit record improving.

So not everything you hear about debt is true - it is well worth doing your research and to establish if you need debt advice or debt management.