Having a low credit score can make life pretty stressful. It can be difficult to cope with your daily finances when you are basically saddled with the fallout from bad decisions you have made in the past. But although it can be difficult, it is possible to rebuild your credit score with time and diligence. Here are some of our suggestions on the best way to go about this:
Living without credit from day to day can be difficult in the modern world. Bills have a habit of cropping up when they are least expected or welcome. There are always going to be times when you need a helping hand to balance out your finances. However, if you are trying to bring about a better credit score, certain forms of finance, like payday loans and credit cards are out – instead, think about joining your local credit union. Credit unions are set to expand massively in response to the public’s general disillusionment with banks. There, you will be able to access affordable credit, and as you manage that credit responsibly, so your score will begin to nudge up.
The next tip has been mentioned many times before, but it nonetheless bears repetition. Check your credit report carefully because it is certainly not uncommon for these reports to contain errors which can have a damaging effect on your ability to source finance. Make sure any errors are rectified immediately.
If you have existing debts on, say, a credit card or personal loan, do everything you can to keep up repayments, no matter how difficult this may be. If necessary, simply make the minimum payments allowed until your finances improve. If you think you will struggle even to do this, you need to grab the bull by the horns and speak to your creditors about agreeing on a reduced payment, even if this is simply on a temporary basis until your circumstances improve.
Another basic but effective tip to help get your finances back on track is to rip up your credit cards. This may seem a bit theatrical, but it works. If those cards are in the bin, you can’t use them no matter how sorely tempted you may be.