Sometimes, things just aren’t that easy to secure. Don’t be disheartened if you have bad credit though, you can easily change that if you are determined enough. To rebuild your financial rating, you need to get rid of the negative credit report information and catch up on past due bills. That way you can improve your credit score.
If you need a loan now though, there are options for those with bad credit who need a loan right now. However, if you don’t need a loan at this very moment, then keep on reading to find out more about how to rebuild your tarnished credit score.
Pay everything on time
Makes sense, right? Your payment history is an important factor in fixing your poor credit rating.
If your payment goes past 30 days, a creditor could report you to the credit bureau. So don’t skip a payment! Also, missing a payment puts you one more step toward a higher interest rate, and that leaves a bad taste in the mouth.
So if you have bad credit, don’t just think to yourself “well what’s the worst that could happen now if I don’t pay anything this month?” It could get worse. Not paying your electricity bill, for example, could mean your power gets shut off.
Ahem, make sure that you pay everything on time.
But if you can’t make the minimum amount to a payee like your phone company this month or to the creditor then make the effort to talk openly and honestly to them about your situation. A payee can be understanding and offer to do one or more of the following:
- Extend your due date
- Remove the late fee
- Not report a missed payment to the credit bureau
It’s worth having that financial conversation, as you can see here.
Whenever possible though, pay everything on time. It’s a good habit to start today.
When you pay everything on time, you’ll show the creditors that you have what it takes to build back up a good credit score. Being able to pay on time involves not spending more than you can pay off at the end of the month and not taking on too many credit cards either.
Get in the habit of building better credit
To build new credit, you need to get rid of all your old habits and replace them with new better ones. In other words, you can’t succeed if you don’t change your bad habits.
If you keep on making mistakes with existing borrowing, you’re less likely to get a future application for credit approved. That’s why it’s so important to change how you do things.
By now you’re wondering what new habits you can do. Here are a few to try:
- Only keep a couple of credit cards
- If you have a few accounts open you don’t use, then close them
- Shred and discard any credit card application that comes in the mail as you don’t need them
- Pay off your credit card balance in full each month
- Never miss a card payment
Online banking is great too, if you can use it. Then you can see at a glance your owing amounts, as well as easily make payments through it.
Consider using a credit card – Responsibly
One of the easiest ways to improve a poor credit score is to prove to lenders that you’re capable of borrowing money and being able to pay it back when possible. The best way to prove to a lender that you can repay the money you owe is by using a credit card responsibly.
By “responsibly,” I mean that you pay off the full balance every month, if possible. If it is not possible, then at least make the minimum payment.
But the best thing when you can is to pay the owed amount in full by every due date. Otherwise you’ll be racking up expensive interest; credit card companies are known for having high interest rates.
If you worry about missing a payment in the future, then you can easily set up a direct debit. That way you don’t have to worry too much about forgetting the date the money is due as it’ll come straight out of your account like clockwork.
You might also be anxious about being rejected for a credit card. If this is something that concerns you, then you could always check your eligibility before applying for a plastic card to make sure that youlll be accepted.
If you are rejected though, then it might be worthwhile getting a loan. You can check out this article here for more advice on what to do when you have money troubles.