Credit Crunch Solutions

The Credit Crunch has left the cashflow of many small business strained, leading to many being forced to streamline and restructure their business debts, both in the short and long term. Credit crunch solutions can be of great help when it comes to financial crisis. Some of the credit crunch solutions include:

Get all of your revolving balances down

Getting, and maintaining, a good credit score is important in avoiding problems caused by the financial crisis. This can be helped by reducing your credit balances as much as possible. Lenders in the UK can see both a person’s total credit availability and total credit use. This information is used when calculating a credit score. Although there is no hard-and-fast rule, maintaining credit use below 75% of total available is good, below 50% very good.

Negotiate a settlement

If you have been struggling with debt and debt collectors are chasing you for payment, they may be willing to accept a reduced payment in settlement. This serves 2 purposes. Firstly, the debt will be settled; secondly, the debt will be marked as settled on your credit file, thus helping to improve your credit score.
When trying to get through a credit crunch, keeping all of your payments up to date is difficult, but if it is possible, can help make life a lot easier should you need to obtain credit in the short term.

Boost up your credit limits

The credit crunch has greatly caused the credit card givers to tighten their terms and conditions. If, however, you have a good credit score and a good history with your lender, you may be able to negotiate an increase in your credit limit. While this may be a solution for short-term expenses, the cost of borrowing on credit cards is still very expensive and should be a last resort.

An alternative option, again only available to those with good credit scores, is to take out a new card offering a 0% balance transfer rate. This will enable you to pay off your credit card debt more quickly, since your repayments won’t be eaten up by interest.

Avoid store cards

Store cards are best avoided. They typically have very high interest rates, high charges, and offer little room for negotiation should you struggle with payments.
You may be offered a discount for taking out a store card, but you should think twice before accepting. The application will be recorded on your credit file and may make it more difficult to obtain general credit in the future since too many records may be viewed as irresponsible borrowing.

If you are struggling to find an appropriate credit crunch solution, it is worth calling a credit crunch solutions specialist to advise you on you options and provide you with a route out of financial crisis.