5 ways to spring clean your finances

Are you doing all you can to keep on top of your finances? Here are five things you might not have considered that can help you stay financially healthy this spring. 

1. Get on the electoral register

Are you one of the millions of people in the UK that isn’t on the electoral register? Or maybe you’re on it, but not at your current address. If you're correctly registered, it means that your identity can be verified easily by potential lenders who search your credit file. If you're registered under an old address or not at all, then this will negatively impact your credit score.

If you need to register or update your address, you can do it here. It only takes five minutes!

If you're not sure you're on the register, you can contact your local council to check.

2. Work on paying off your debts

If you've got several debts, its best to prioritise paying them off. Even paying just an extra £10 each month towards your credit card will clear balances more quickly and save on interest charges. While it might seem as though you’re spending more money at first, you’ll save cash in the long run once you pay them off.

Remember, when it comes to using credit, make sure you’re only using around 25-30% of your limit. This is referred to as credit utilisation. Using more than 25-30% of your credit limit can give lenders the impression you need help with credit or that you’re having problems repaying debt.

When it comes to any loans you have, look out for early repayment fees. If you have multiple debts, you could consolidate them or transfer them onto a fixed term 0% interest card. The idea is that the interest rate should be lower than on your existing debts and fewer payments are easier to handle. However, there’s usually a fee for transferring and a limit to how much you can transfer. If you're considering this, then do your research first to see if it's suitable for you.

Find out how to get help if you’re struggling with debt.

3. Remove any old financial ties

If you’ve ever had joint financial arrangements with someone else, like an ex-partner, it could still be on your credit file, even if the account is settled and closed. If this is the case and the other person has a poor credit history, this could impact your score as well.

To remove any financial ties, you'll first need to make sure the account is closed. You can then write to the credit reference agencies and ask them to remove the association from your file. You'll need to show proof that the account is closed. Contact each credit agency - Experian, Equifax, and TransUnion to let them know.

4. Check your credit report is up to date

Regularly checking your credit report will allow you to identify any discrepancies or errors on your file. It also means that if your score is on the lower side, you can actively work on improving it.

When you check your credit report, ensure your details are correct and up to date. If you notice any mistakes, don't hesitate to get in touch with the credit reference agency.  It's good practice to monitor your credit report from each of the credit reference agencies.

You can check your Equifax credit report for free with CredAbility.

5. Cancel any unused credit cards

If you’ve got any old credit cards with a zero balance that you no longer use, it could be a good idea to cancel them. This way, you won't be tempted to use them, and it will reduce the chance of fraud.

Bear in mind that you should aim to keep your credit utilisation around 25-30%. If cancelling a card means that your usage would go up then work on repaying what you owe first.

For example, if you had two credit cards with a £1000 limit on each, and you spent £500 on one card and £0 on the other, then your credit usage would be at 25%. If you cancel the card with £0 your credit limit would increase to 50%. In this case, you should repay the £500 before you cancel your other card.

Just stopping using them won’t close the account - you need to speak to the lender first. 

You can calculate your credit utilisation here.