With the modern economic climate a worrying one for many people all over the UK, it is important to understand how you can manage the details of your personal finances at all times. There could be times when you face short-term financial crises, where you require the assistance of a payday loan to tide you over until your next payday, or to borrow money from a close friend or family member. Other than that though, learning how to manage your personal debt is a great way to ensure that you can improve the quality of your life over time, building a good credit score as you pay your way out of debt.

Depending on the level of debt that you are facing it could make sense to look for specialist help through a debt management plan. Alternatively, we have put together some helpful tips and hints as to how you can make a positive change in the financial habits you have, as well as the way you can focus on managing and paying off your debt in a calm way.

If you have multiple debts that are stacking up to a dominating and scary figure it is easy to scare yourself into always paying off the larger debt first. Instead, maybe look to get into a good habit of paying off debt by paying off the smaller debts first. The easier debts that can be paid off much more quickly, might not have as much interest attached, but by paying them off quickly you can feel good about your own debt journey, and see real progress as the debts get ticked off.

Even within this approach however it is important that you never miss a payment on any form of credit. To do so is a real black mark against your credit score, and could damage your ability to acquire credit in the future. Pay off at least the minimum repayment each month, but pay more if you can afford to on those debts with a higher interest rate attached. If possible, with credit cards look for 0% interest offers and balance transfer promotions to lower the interest being paid overall.

Also don’t be scared to have more than one credit card, or multiple lines of debt. It might seem like this is only problematic, but in terms of your credit score it can actually come across as a positive in terms of your credit file to demonstrate that you can maintain repayment on multiple lines of credit over a long period of time.

Whether you are looking towards a payday loan for a short-term boost to your cashflow prior to your next payday, or you need greater help with managing a large debt that is weighing down your life, it is important to understand your debt, where it comes from, and how you can effectively manage it over time to bring the amount down in a manageable way yet also allows you to improve your credit score.