As things get tougher during the recession, fears of unemployment and reduced income are natural – but borrowers must be prepared for anything, and a credit check is a central part of that preparation.

A credit check, which can be found on a number of online credit firms, which show you your credit history. It details everything you have ever borrowed, how you paid it back, whether you missed any payments and how much you currently owe.

It’s crucial to check this because you can see exactly what your financial position is – whether you could be able to get finance, whether you have past arrears. And you can, if necessary, edit your score. Explanatory notes can be added and mistakes can be rectified. But there are other things you should be doing to make sure you can weather any storm.

Set to a budget and stick to it. Don’t make it too frugal, because it will become unattainable, but make sure you are saving enough to pay debts, cover repayments and even invest into a savings account.

And if you are planning to use unsecured debt like a new credit card, think carefully about how you would manage the repayments if interest rates start to rise again, or if you suddenly find yourself out of a job. This is especially important in the case of mortgages and secured loans where your home is at risk.

Owen Roberts, head of www.callcreditcheck.com, says: “As redundancy becomes a real possibility for more and more people in the UK, people need to keep a closer check than ever on their finances. Our own research has shown that 28% of adults in relationships could not last more than two months on savings if their partner lost their job. Checking your credit report will give you a comprehensive overview of all your financial commitments and can highlight where you can make savings in order to best cope with any unexpected changes in your financial situation.”

SOURCE: Callcreditcheck.com, 18/03/09

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