The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald

The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald.
By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.

We all like to say, Yes. But sometimes the answer has to be, No!
It can be annoying, but when the answer ‘No’ applies to a request for credit, then there is usually a good reason for refusal.
If you’re turned down for a loan or credit card, the credit card or loan company should tell you whether you were turned down as a result of a search on your credit file.
If so, they should tell you which credit reference agency they used. You can ask why they refused you but they don’t have to give you a detailed reply.
But mistakes can happen. If you do spot a mistake, write to the credit reference agency and ask for them to correct it immediately.
Make sure you include an explanation about why it’s wrong, and include any evidence you have. The agency has 28 days to act. The relevant detail in your credit report will be marked as ‘disputed’ while they investigate it.
You might ask ‘why have I been refused credit?’
If you have been refused a loan or turned down for a credit card, the worst thing you can do is to keep applying for more credit.
Any credit applications you make – successful or not – will show up on your credit file.
Several applications in a short space of time may make lenders think you are desperate for cash. This may damage your credit rating further. Your credit rating affects whether you can get credit and how much you can borrow. It can also the affect the interest rate you may be charged.
What to do next depends on why you are looking for credit.
If you need to borrow to pay off other debts
If you’re looking to borrow in order to pay off other debts or to help you pay bills and living expenses at the end of the month then it’s worth talking to a free debt adviser as soon as you can.
They will be able to help you come up with a plan and avoid getting deeper into debt.
If you’re looking for credit to fund a purchase, such as buying a car, and you can afford the credit or loan repayments, then check your credit rating.
You do this by getting hold of your credit report – this is likely to be crucial in influencing the lender’s decision about whether to give you credit or not.
You can see your report by subscribing to a full credit report service or just buying a one-off report.
If you’ve been turned down for a loan or card it could be a good opportunity for you to think about your current money situation.
If you already have debts you’re struggling to repay, you should talk to someone about them. There are a number of organisations that offer free, confidential debt advice.
If you have paid off your debts, you should think about trying to save some money if you can to build up an emergency savings fund.
If you need to borrow some money for a purchase and you can afford the repayments, there are other options beyond credit cards and personal loans.
If you need to borrow some money at an affordable interest rate, find out if there is a credit union near you. Credit unions are non-profit organisations set up to help people in their local communities.
There’s a cap on the amount of interest they can charge on their loans of 3% a month or 42.6% a year APR. There are no hidden charges or penalties if you repay the loan early. With most credit unions, you have to save for a period before you’re allowed to borrow.
Think carefully before borrowing using payday loans, home credit or by using a pawnbroker.
And avoid illegal loan sharks altogether.
You can find out more about money matters on the new-look Clay Shaw Butler website (under our news for business section) -
http://www.clayshawbutler.com/news/latest-news-for-business
We have a strong and experienced team with great local knowledge all geared-up to helping you get the very best from your finances – whether that is as an individual or as a business.
We stay ahead of the game by putting great store by continual professional development for our staff.
With Investors In People status at Clay Shaw Butler, we care passionately about making sure our staff have all the tools they need to serve you, our customers.
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