Bad credit is detrimental to your financial health. While it is too easy to screw your score, it will take time and a lot of patience to repair it. The good news is that just one year of diligent work will help you get a better score and with continued efforts, you will be able to get a decent number of the report too.
Here are some ways in which you could fix your score.
Get your free report
You can get your credit report for free. Download and/or print a copy of this document and look for errors. If there are any, ask for their rectification. You could also check which kind of loans have hurt your score the most. Avoid making the same mistakes again.
Pay the loans on time
If you have any ongoing loan payments left, ensure that they are paid on or before time. Never wait for the last moment to make a payment. As soon as your paycheck arrives, make adequate arrangements for paying off the debts first. This will help you avoid late payments and fines as well. If you continue paying your debts on time, you will stand out as a good candidate to get further funding and your score will improve as well.
Live below your means
If you have a spending problem, then try to live below your means, at least for some time. After paying off your loans, take some bare minimum amount that you will need to survive. This will include payments for rent and other utilities. The rest of the money, which you usually spend on splurges, should be saved in a separate bank account that provides you a high rate of interest. You could also invest that money in a good financial instrument. In this way, you will get a chance to save money, let it grow and maybe even have enough to pre-pay a loan.
Don’t close your credit card
Though many financial experts believe that you should close your credit card, this move hardly makes a difference to your score. In fact, it removes all chances of repairing your score too. Keep your credit card moving and buy only those things that you really need. Then, ensure that you pay your dues in full each month. Even if paying in full doesn’t seem like a viable option, pay the minimum value on the card. By doing this, you are suggesting that you are serious about paying back debts. This will repair your report and add points quickly. Closing the card could be counterproductive at this point.
While repairing your credit, you may not be eligible for loans at several banks and lenders. In times of need, turn to heartloans.co.uk. Get a small payday loan for your urgent requirements and pay them off as soon as your next paycheck arrives. These are hassle free loans, but with high rates of interest. Take these loans only when you are sure you can pay back on time. If you fail to do so, it could reflect on your credit rating as well.