UK & World News
What shop closures can teach us about our own finances
2012 was undoubtedly a golden year for sport in the UK, but it was in many ways a bad year for sporting goods shops - along with card, computer game, clothing, health food and many other retailers. All over Britain, High Street stores are closing faster than ever before - up to 28 a day now, from an average of 20 a day last year*1 - and independent shops aren't faring any better.
It's easy to assume that the economy's to blame. But is that all there is to it? And what lessons can we learn about our own ability to weather the current financial storm?
Retail experts point out that failing to respond to changing market conditions and to address underlying problems have contributed to many of these unfortunate stores' demise*2. Many of us are just as guilty of doing this when it comes to our finances, especially credit.
If you're beginning to take a head-in-the-sand approach to austerity, it might be worth using these tips to get back on top of your finances and avoid going the way of the growing number of retailers closing their doors for the last time.
Know where your money is going - do an audit of your income and outgoings and look for ways you might be able to cut back. By all means use some credit on a regular basis, but never take on more than you can afford.
Check your credit report - this lists the credit you've had, including loans, mobile phone accounts and your mortgage, plus the repayments you've made, so you'll be able to assess your current borrowing commitments and how well you're managing them. You can see your Experian credit report for free with a 30-day trial of CreditExpert*3.
Sort out any mistakes - lenders use information from your credit report to calculate your credit score, so get into the habit of reviewing your Experian credit report on a regular basis - make sure everything is accurate and up to date and query anything that isn't with your lender.
Register to vote at your current address - lenders use the electoral register to help confirm your identity and your home address.
Don't keep emergency credit accounts - these could affect future applications because lenders can take into consideration the amount you could borrow, rather than what you actually owe.
Prove you're reliable and responsible - late or missed repayments stay on your credit report for at least six years, so pay on time every month (direct debits mean you can't forget). You should also stay within your agreed credit limit and try to repay more than the minimum.
Don't make multiple applications - Space out your credit applications and avoid making several applications close together. Lots of applications can make lenders think you're in financial trouble or are a victim of fraud. Longstanding accounts can also earn you extra points on your credit score.
Don't ignore problems - if you're struggling to make your repayments, contact the lender straight away. You may be able to negotiate a more affordable payment schedule.
*1 UK high street closures accelerating, Financial Times, 28 February 2013. http://www.ft.com/cms/s/0/9b9697c0-80f2-11e2-9fae-00144feabdc0.html#axzz2MgJBKemN
*2 As above.
*3 New members only. Monthly fee applies after free trial. Free trial period starts on registration - further ID verification may be required to access full service, which may take up to five days.