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Bad Credit Can Get You Down, But Here’s Why You Shouldn’t Let It

So, you’ve got bad credit. You’re not alone; there are millions of people all over the world who have a bad credit rating, and most of them wish it wasn’t so. You might feel like there is nothing that you can do and that your situation is already set in stone. But that’s not the case. And having a bad credit rating certainly doesn’t have to mean that your life has to be any worse as a result.

Below, you will find a lot of things that you need to know about bad credit and what it means for you. First of all, we’ll assess the reality of the situation and why it doesn’t have to be as negative and catastrophic as you might see it at the moment. Then we’ll move onto discussing some of the things that might help you to improve your credit score in the near future. So, read on now to start learning about all that.

 

Reasons to be Upbeat About Bad Credit

Yes, you have bad credit, but so what? There are some reasons to be hopeful and positive about your situation even if the situation might seem pretty grim to you right now. Instead of getting down, here are some facts to consider about the situation you’re currently in.

Credit Ratings Are Changeable

The first thing to be aware of is the fact that credit ratings are changeable. Just because your rating is bad right now, that doesn’t mean it will remain so forever. You just need to be aware of the situation and then take some steps to change it if this is a problem that is really bothering you. There is no reason why you can’t have a perfect credit score in a year or two’s time. Of course, it won’t be easy to turn things around if you’re in bad shape right now. But very few things in life are easy, especially when it comes to finances. You will find plenty of information below about how you can improve your credit rating.

There Are Lots of Companies That Cater for People with Bad Credit

However, you don’t even need to improve your credit rating if that seems like too much hard work for you right now. That’s because there are more companies than ever that are happy to offer financial services and other kinds of deals to customers with bad credit. They take extra precautions to ensure that they are covered, and you won’t necessarily get the best deal in the world, but knowing that there are options open to you might be a relief. Companies that offer help with poor credit are very common, so don’t assume that bad credit has to limit you. That probably isn’t the case at all.

They Are Not the Only Thing Creditors and Lenders Take Into Account

When creditors decide whether or not to offer you a loan or some other kind of financing, they don’t just look at your credit rating. Sure, this is still important. And if you have a truly terrible credit rating, this will stand out and hold you back in some circumstances. But a slightly negative rating won’t necessarily hold you back if you are in good financial shape in other ways. For example, you might have a high income and low debt obligations. A kind of person like that is always going to be attractive lenders, even if their credit rating is not exactly the best in the world. You shouldn’t assume that your credit rating is the be all and end all for creditors and lenders.

What Can You Do to Improve a Bad Credit Rating?

Having bad credit isn’t something that has to hang over your head for the rest of your life. In fact, you can take action and do things to improve that bad credit score before it has a negative impact on you. Here are seven ideas that everyone with bad credit should try to embrace.

Don’t Apply for More Credit Until You’re Out of Trouble

For people who are currently in financial trouble, applying for more credit will only making their rating worse. It’s important to focus on clearing your current debts before you start piling even more debt on top of it. If you keep borrowing and borrowing, the situation will just get gradually worse for you, and that’s not something that you want to have to deal with, is it? So, stop applying for more credit and more credit cards until you are out of trouble and have no more debt obligations.

Always Pay on Time

Paying on time is probably the single most important thing you can do if you want to improve the health of your credit rating. If you have debts that you are always late with repaying, this will show up on your file and cause your credit rating to fall. The same applies to things like bills. When you miss a payment, it’s no good at all for your credit rating. And if this becomes a pattern that keeps repeating, it will be even more detrimental for you. So, organise your payment schedules better to ensure that you never end up making payments later than you should.

Cancel Credit Cards You Aren’t Using

If you have a credit card or credit cards that are still valid but aren’t being used, you should cancel them. Using credit cards is not a problem in itself. If you use them properly and stay in the black, you will have no problem regarding your credit rating. However, if you have credit cards in your name that are not being used, this can have a detrimental effect on your credit rating. It takes no time at all to ring up the credit card company and have the cards cancelled. This is what you need to do if you are not using the credit card attached to you anymore.

Try to Avoid Credit Rejections

When you get rejected for a loan or any other form of credit, it has a negative effect on your credit rating. So, that’s why it’s not recommended that you apply for too many loans and credit cards. And you should be careful about which ones you apply for when you do apply. If the rules are strict and you don’t think you have much chance of having your application accepted, it’s probably better to step away and avoid having to deal with a rejection. The fewer times you are rejected, the better it will be for your credit rating, so this is very important indeed.

Make Sure There Are No Mistakes on Your File

Mistakes on your file will have a negative impact on your credit rating. These mistakes are usually no fault of your own. Everyone has a file, and this is what your credit rating is based on, but sometimes slip-ups happen. For example, many people find that other people’s debts end up on their files. This is obviously going to have a negative impact on your credit rating, even though that debt has nothing to do with the person who it is attached to. So, check your file and look for anything that seems unusual or out of place to you.

Register All Debts to Your Correct Address and Name

If you have debts, they need to be registered to you in the right way. If there are discrepancies, it will do further damage to your credit rating. That’s not what you want, and it’s such a small thing that can be so easily fixed. So, contact the relevant people and make sure that your details are correct with them. And if you have moved house and now have a different address to when you took out a loan, be sure to update it at the nearest possible opportunity. Nobody wants such a small thing like that to have an impact on their credit rating, but it happens to many people.

Avoid Joint Finance with Other People with Bad Credit

When opting for a joint finance deal of some kind, it’s not just your credit rating that matters; the other person’s can too. And if that other person has a worse credit rating than you, their poor rating will rub off on you. That’s why you need to be very carefully about how you tie yourself too in financial terms. There are plenty of things that can go wrong for you if you take out a joint finance loan with someone who has a bad rating. It can often be best to avoid these kinds of financing options altogether because you can’t control the actions of that other person. You can only focus on what you do.

Now that you know why bad credit doesn’t have to mean the end of the world for you, you can start to take action. By finding alternative paths for you or finding ways to improve your credit score, you will be able to escape the problems that arise from having bad credit.