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Getting Credit - Latest Trends for 2010
It has been a miserable time for the UK economy and a large proportion of the working population. The debt burden has spiralled; both on the country as a whole and for the many trapped in negative equity by mortgages that far exceed their property values.
And it looks as though 2010 is not going to be a bounce back year. Forecasts for GDP growth range from -5% to 0%. Neither of which is a particularly exciting but considering where we have come from the higher forecast, if achieved, has to be considered progress.
It seems that the financial markets have, after massive state support, stabilised enough to make 2010 somewhat easier for those seeking credit. 2009 was dire for anyone seeking credit. Businesses couldn`t borrow as banks feared corporate insolvencies and personal borrowers found it impossible to find mortgage funds without large deposits and an excellent credit history.
Following pressure from government it appears that financial institutions are now starting to lend more freely. But both business and private users will be surprised at how rates and terms have increased compared to the days of easy credit in the early 2000`s.
What is clear is that Banks are now looking to redraw the base of what is acceptable in terms of lending as they try to rebuild their balance sheets and profitability. That means increased arrangement fees as well as wider lending spreads. And it could get considerably worse with the economic outlook so heavily dependent upon the UK`s credit rating and how it proposes to deal with its national debt!
As we rise out of recession, inflation will be a major challenge and the Bank of England will have to raise interest rates to try and control it. Therefore, if you need to renew a fixed rate mortgage now could be the best time to do it. Make sure that your credit history is spotlessly clean by checking with one of the online agencies like Experian. Correct any historical errors or mistakes and get organised.
Likewise, it could be a good time to consider getting all your future financing needs organised now before rates climb and access to credit becomes harder. The key goals for 2010 have to include paying down debt, reorganising long term financing onto better terms and finding ways to save money. Every penny will count through what looks like being a tough and challenging year.
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