'Make cutbacks' to get through credit crunch

By Sarah Engle, Wed 21 May 2008 - Published in Banking

Individuals who are struggling with their finances should consider making cutbacks rather than telling lies to get more credit, an expert has warned.

While the cost of living is rising and lenders tighten their criteria for credit, consumers should look to make cutbacks to cover the increased costs, it has been suggested.

"Borrowing money is becoming increasingly more difficult, what [people] really need to do is try and make cutbacks," said David Kuo, head of personal finance at Fool.co.uk.

He suggested consumers should look to make budgets to see where money is coming in and going out.

And if outgoings are larger than income, cutbacks should be made, he said. As well as this, consumers should ensure they have a safety net in their budget each month, he said.

According to research from UK fraud prevention service CIFAS, the number of people lying on applications for credit has risen by some 13 per cent in the first three months of the year.

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