The COVID-19 pandemic has meant tough times for all of us. Whether you’ve had a job, lost a job, been home schooling or missed out on seeing loved ones — none of us has escaped unscathed.
With travel bans and furlough schemes, it’s been almost impossible to think about any kind of future, let alone our financial one.
While there is still a great deal of financial uncertainty — whether it’s personally or on a grander scale — it can be difficult to know where to begin and what to prioritise.
Perhaps your mortgage holiday is coming to an end or you’ve delayed paying your credit card bill and don’t know how you’re going to cope. Add in the misery of prolonged lockdown and it can seem hard to see the wood for the trees when it comes to improving your credit scores.
According to research, money worries have far outweighed medical ones over the course of the pandemic. Out of 30,000 consumers surveyed across the world, 52% said their lives have been impacted by the current situation.
Help is at hand
As things begin to open up and the economy starts moving again, there is no better time to reevaluate and consider how you would like the future to look — and a solid foundation of monetary well-being is a great place to start.
Figures from the Bank of England show that in 2020 British households repaid the most money on credit cards, student borrowing and loans since records began almost 30 years ago.
Be honest
As the old saying goes: “A problem shared is a problem halved,” and it’s certainly something to consider when it comes to your finances. Don’t be embarrassed to tell loved ones if you’re worried about money — most people are at some point in their lives. We are living in extraordinary times and we need to support one another.
Know your financial self
Take some time out to think about why and how you spend — or save. Do you deal with bills straightaway, or do you put off paying them to the last minute? Are you compulsive, or do you panic buy? Does your spending depend on your mood?
Take action now
Get to know your credit scores
One easy way to start saving money is by investigating, monitoring and improving your credit scores in detail. This has been a difficult time — it may have been hard to keep your scores in tip-top condition, especially if you’ve been out of work. So check out our Credit Health section to see what might affect credit scores and how to make improvements to yours. If your credit rating is in good shape, you’ll be in a better position if you need a loan or a lower interest rate on your credit card.
Pay your bills on time
We understand that with everything that’s been going on, paying your bills on time may not have been at the top of your priority list. But now is the time to start. Take note of when your monthly bills come in and act accordingly — perhaps by setting up direct debits to cover minimum payment requirements.
The more promptly you pay, the better it looks, and you will avoid late charging fees. But if you’re really stuck and you need a breathing space, contact your lenders directly — they may be able to give you a payment break.
Understand your interest payments
Investigate the best rates available on credit cards. A lower rate will save you money over time, and with monthly payments you can really chip away at your debt. Alternatively, you might be able to find cards offering 0% balance transfers, which are a great option if you’re struggling to meet demands. Why not check out our Help Centre, where we can tell you whether you’re likely to be approved for this kind of card.
Consider switching
Whether it’s changing energy suppliers or moving on from your internet, TV or mobile providers, with a little digging around, there are some great savings to be made by switching. Most energy companies in the U.K. are signed up to the Energy Switch Guarantee, which means your switching should be done within 21 days. And it’s not just about the extra cash you can save to help pay off any debt you may have to boost your credit scores — it’s also trading up to a better service.
Next steps
If you’re worried your credit scores have been affected by your financial situation during the pandemic, all is not lost. Now is the time to take some small, proactive steps that could improve your future financial well-being — as we begin the journey back to normal