This is part 5 of the 5 part series “Dig Yourself Out of Debt”, published every Thursday. Surfing old posts? You can catch up on Part 4 by clicking here, or start at the beginning by clicking here.

Hopefully by now you have worked out what you owe, started spending less than you earn, got your avalanche rolling and worked out why you ended up in debt in the first place.

Is there anything you need to do beyond that?

Just a little bit of housekeeping really.

Credit Reports

In part 1 I talked about using your credit reports to find any errant accounts you might have forgotten about.

Credit Reports provide a much wider view of your financial wellbeing than just who you owe money to, though. Now would be a good time to badger me to finish writing my “A Guide To: Credit Reports” and see all the different pieces of information they show, why they are important, and how to correct them if something is wrong (or doesn’t tell the whole story).

In the meantime log back in to your credit reports and take a careful look at all the information they present. Are there any inaccuracies? Are you linked to anyone you shouldn’t be?

Keep Records

While you and I were busy burying our heads in the sand and avoiding creditors, I suspect your record keeping was a little lacking in the accuracy department just as mine was. Everything that came through the door got filed under ‘S’ for Shredder, ‘R’ for Recycling or ‘P’ for Piles and piles of letters out of the way somewhere.

Now you have got to grips with yourself and your finances, get a proper filing system organised. There are lots of different methods about, but get yourself a filing cabinet, box file or some other container and get sorting.

Properly accessible financial files protect you in case of error. It makes preparing to apply for a loan or mortgage that much easier. Good recording keeping also enables you to analyse your financial life down the road should you wake up one morning and wonder “Just how much has my car cost me in its lifetime“?

Lost for where to even begin? The Simple Dollar has laid out the system I use now, or if you want to be 21st Century about it, check out the digital filing system that I want to try soon.

Reclaim Charges

This is not a guaranteed process,but for the sake of the few pounds it will cost you, it is worth spending the time to do. Few people would have gone through their own debt meltdowns without getting dinged for fees on bank and credit card accounts hourly or daily at the worst part of your journey. In the worst cases some people have reclaimed over £20,000. Some, as little as a few hundred pounds. The point is it is your money, the banks and credit card companies in the majority of cases had no legal right to fine you (only to recoup their ‘reasonable costs’), so you get to claim back with interest.

Keep Reminders

Now you are working towards getting out of your debt hole – or if you already have – keep reminders around you in the places you are likely to spend money. If you are working towards buying a house, put up a picture of your dream near your computer if Amazon is your weakness. If you like a double-mocha-skinny-latte instead, put a smaller picture of the same thing in your wallet.

Always count to 10 on the smaller unnecessary purchases, and keep a 30 day list for the larger ones. These tips and others are explained in my Frugal Friday! post for September 18.

I told you there was not much more to do, and I wasn’t kidding! Debt is just a very small slice of the whole ‘personal finance pie’ though, and I would hope and encourage you to stick and keep an eye on the entire pie to get tips all over the place for saving and growing your money.

Since splitting with my wife last December, I have been constantly reminded of her presence by virtue of her being a ‘Financial Associate’ on my credit reports. This never used to be a big deal; Up to the point of the split she had an excellent credit rating. Since then however she dropped the bombshell that she has been declared bankrupt.

I have been racing around since learning this, trying to get her off my reports by filing Notices of Disassociation with the three Credit Reference Agencies here in the UK. When I apply for credit, she is checked as well. When they see ‘Undischarged Bankrupt’ on her report, they tend to (quite understandably) run a mile.

What is a Notice of Disassociation?

It’s essentially a document you send to a Credit Reference Agency (CRA) notifying them that you are no longer financially linked to another individual. Each CRA has a different method for unlinking, but all require much the same information.

Why Would I Be Linked?

People become linked when they hold a joint financial product: For example they may hold a joint bank account, have (as in our case) taken out a joint loan, have a mortgage, or jointly hold credit cards or any other line of credit in ‘both names’.

Can I Become Unlinked?

The short answer is yes. The longer answer is it depends on the circumstances!

If the joint product that linked you is ‘Settled’ (paid off), then you can request the link be broken as you no longer hold a joint credit product. In my case for example, the joint loan we had was settled a while ago (by taking out a bigger one at a higher rate – doh!). Because we held no other joint products, my request to break the link was approved by all 3 CRA’s.

You don’t have to stay financially linked just because you’re still married, or still going out with each other, or they are still your parent, or whatever. The only factor that matters is that whatever caused you to be joined, must no longer be active.

I’ve broken down the steps you need to take with each CRA below to become financially disassociated with a particular person if you need to.

Experian / Credit Expert

I’ve listed this one first, because they’re the most pleasant to deal with and the fastest to act on the request (in my experience it took them 5 days from start to finish). I was in my 30 day free trial of CreditExpert and it didn’t cost me anything to request, or to see the result. Because I did it via QuidCo, they actually paid me 50p to sign up for my free report!

1. Sign up for their free trial (direct) or QuidCo and get yourself all activated.
2. Pull your Report (don’t include your score)
3. Fill in this form (you’ll need your report reference number from (2)).
4. Wait for the confirmation email (5-14 days).
5. Re-Check your report to make sure the association is gone.
6. Ring 0800 656 9000 (Option 4) to cancel inside 30 days.

Equifax

These guys are the next easiest to deal with, but I found they did not act on my Notice until after my free trial ended and they’d taken my first subscription payment of £6.99. However, as above, if you do it via QuidCo you’ll get a cashback kickback for signing up to the free trial. In the case of Equifax, they’ll pay you a fiver. Therefore you’ll either make £5 pure profit from doing this, or at the very worst only be stung for £1.99 overall.

1. Sign up for their free trial (direct) or QuidCo and get activated.
2. Pull your Report and note the reference number on it.
3. Create a Customer Assistance Account (Click ‘Login’ then ‘Create New’)
4. ‘Ask A Question’ > About ‘Associate Names’ (and fill it all in)
5. Wait forever (they’ll email you when they’ve done it).
6. Re-Check your report to make sure the association is gone.
7. Ring 0800 7839421 to cancel your membership.

CallCredit

These require the most work from you, and also the most initial outlay. They offer no free trial, and require you to spend £12.99 upfront to get access to their service. The only saving grace is it offers you 3 months of access and includes a calculated credit score for free. You will also need access to a printer, an envelope, a stamp and a post box.

1. Sign up for the service and get activated.
2. Pull your report and note the reference number.
3. Print out this form and fill it in.
4. Post it (see below).
5. Set a reminder in your diary to cancel in 3 months.
6. Log in > Account Details > Cancel Subscription button.

The completed form should be posted to:

You will receive a letter by return postal mail advising of the result (about a 3 week turnaround).

As you can see doing this will cost you about £13.35 (including the cost of the stamp and envelope) but if you need to get someone off your report for the same reason I did, then it is money well spent. If you are a QuidCo user already, then you could get paid £5.50 to do the first two meaning the third one only really costs you £7.85 for 3 months of access to your credit report and score – which isn’t all that bad at all.

Let me know how you get on. Did you have any issues reporting a problem with your credit files?

This is part 1 of the “Dig Yourself Out of Debt” Series, published every Thursday. Surfing old posts? You can access every post in this series by clicking here.

I’m a regular over on the Money Saving Expert forums, particularly the ‘Debt-Free Wannabe’ area. On a daily basis, people post that they owe money, but they’ve no idea to whom, how much for, or at what rate. Before you can even begin to cut your debt, you have to know what you owe.

Priority Debts – First things first. Do you have any Priority Debts? These generally are:

• Council Tax
• Mortgage / Secured Loan / Rent
• Child Support
• Court Fines

Falling behind on these can see you homeless, sent to prison or both, hence the term ‘priority debts’. Either is unlikely though, if you make a best effort to pay back what you owe with what you have available to you. In terms of council tax, the minimum arrears payment for someone on a low income can be as little as £2.65 a week.

Once you have got your priority debts under control, it’s time to attack ‘everything else’.

Find your loan agreements – Hopefully you’ve kept them safe and accessible. These will show what you’re paying, at what rate, and when it ends. If you can’t find this then check your bank statements to at least get some idea of the monthly figure. We’ll see in a little while how to find the remaining missing information.

Find your credit card statements – or access them online. Credit cards with revolving balances are usually one of the most expensive ways to borrow money longterm, with perhaps the exception of the payday loan sharks. Interest rates vary wildly from a very good 6% up to a wild 55% and beyond, depending on your own personal circumstances and payment history.

Are you in arrears with utilities? Don’t forget to take into account any arrears with your electricity, water, gas, or telephone suppliers. These generally won’t affect your credit rating but can have much more direct consequences, i.e. disconnection.

Are you in arrears with credit companies? You need to take action right here. These will affect your credit rating, and can and will end up costing you a fortune for up to 6 years after the fact. Talk to your lenders and come to an arrangement to pay what you owe, including arrears. Ask them if they can freeze your interest, effectively turning the credit product into a fixed-term loan. Don’t bury your head in the sand over the issue, as it’ll only get worse the longer you leave it. You’ll also probably start to get harassing telephone calls hourly or daily around this point, demanding you make payments you probably cannot afford. You don’t have to take this though: demand all contact by written form in future and advise them that further telephone calls will be dealt with as harassment. Speak to one of the debt charities (CCCS are very good) or Citizens Advice as a matter of urgency.

Defaulted. Debt sold. Now who do I owe? – This is where it gets murky. If you know who you owed prior to this point, contact your old lender. They may be able to tell you who they sold the debt onto.Alternatively pull your credit reports and see where the defaults are, and who they are from. This will also give you some idea of the amounts. If it has got to this point, your credit rating has already likely taken all the battering it’s going to for this debt, so it gives you the upper hand. Your debt would have been purchased likely for pennies in the pound, so you may be able to make a vastly reduced payment to the Debt Collection Agency. They would get their ‘profit’, even though you pay far less than you originally owed. It won’t fix your credit report though, but neither would paying back the full amount.

Get Your Credit Reports – There are three Credit Reference Agencies (CRAs) in the UK: Equifax, Experian and CallCredit. These folks compile your financial history in terms of your borrowing and more importantly, your reliability in paying back. Other lenders then use this historical information to credit score your future suitability for a particular product.

The information on the files remains for 6 years from the point of settlement, so if you had a bumpy credit card ride when you were 18 and finally closed the account when you were 20 it can still affect you when you try and get a mortgage at 25! Check their respective websites for a 30 day free trial, but remember to cancel before the period is up to save paying anything. Right now (at the time of writing) Experian and Equifax offer free trials. CallCredit charge £12 for 3 months of access.

One benefit of accessing your reports is they can help fill the gaps in your lending knowledge. The CRAs will know what you owe, to whom, when the agreement started, how much you should be paying, and when those payments are due!

Knowledge is power, and once you know what you owe, you are very knowledgeable indeed.

Continue reading the Dig Yourself Out of Debt Series – Part 2 is here.