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Debt Problems Can Leave 'Lasting Impact' On Ability To Get Credit

Aug 18, 2007
Dicing with debt at a young age could leave Britons with greater financial difficulties as they get older, it has been suggested.

In a study in which art imitates life, Equifax pointed to the fictional life of Hollyoaks' Jessica Harris. Played by Jennifer Biddall, the Channel 4 soap portrays what happens when young people consistently run up debts on credit cards in an attempt to pay off loan sharks, as the once-spoilt teenager is forced to fend for herself financially. Although the programme is fictional, the online credit information provider warned it should act as warning to its viewers about "the horrors of debt".

External affairs director Neil Munroe reported that "Jessica's storyline has developed into a vicious circle of debt, which will be familiar to many students and young people watching the show". And with the average graduate leaving university with debts of 12,363 pounds, the director suggested that many students across Britain will be actually living the life portrayed on screen "but without the glamour of a soap opera".

He added: "Unmanageable debt can have a long lasting impact on an individual's ability to get credit, not to mention the stress and anxiety. Anyone in Jessica's situation should apply for a copy of their credit report to gain a clear picture of their financial situation and start taking control of their finances."

As a result, Mr Munroe suggested that those who continually struggle with their finances and consequently damage their credit rating while at university may find themselves with little option but to opt for a bad credit loan should they look to borrow money in later life. "When students leave university, a history of bad debt could come back to haunt them when they apply for a mortgage, loans or even jobs. The best way to deal with debt is to seek advice and bring it out in the open. Hiding debt is a sure way to heartache, as Hollyoaks is showing," he asserted.

This led the Equifax representative to advise consumers to "own up to the debt" as the "head in the sand" approach may not prove to be a long-term solution to their problems. By getting in touch with lenders, it may be possible to agree a more realistic monthly payment schedule. Seeking out free advice and applying for a copy of your credit history was also recommended for young people struggling with debt, as was explaining their situation to loved ones.

Meanwhile, in findings carried out by Beacon Homeloans earlier this year, the majority of consumers were reported to lack understanding about the criteria needed to successfully apply for bad credit loans. The study showed that less than half of those surveyed are unaware that missing repayments on types of borrowing such as credit cards could damage their request, with about one in three incorrectly believing that they could be turned down if their family members have had a history of debt difficulties. Consequently, marketing manager Nicola Severn claimed that more needs to be done in publicising the effect that "an individual's financial status has on their ability to borrow".
About the Author
Tom Dawson writes for Essentially Home Loans where visitors can apply for secured personal loans online, we also specialise in bad credit secured loans for UK residents. Visit Today: http://news.essentiallyhomeloans.co.uk
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