Credit ratings are one of the most hated aspects of computerised finances today. People who have a good credit rating do not fully appreciate how debilitating a bad rating can be. Someone with a very bad credit score can find it difficult to even get a bank account.
And the worst part is that often, people who have bad credit scores are not bad people, they are not fraudsters or bad with money, they have simply fallen on hard times and found it difficult to keep up with payments.
Here are a few tips to help you clear a bad credit record and re-build it.
Pay your debts. If you are struggling with debt, go to a debt management agency or speak to the citizen’s advice. They will help you arrange manageable payments for all your debts. Even a small amount each month toward each debt will gradually repay it. It may take some time but as long as you keep it up, your credit score will not get any worse.
Once you have cleared your debts, the next step is to start to build your credit. One of the best ways to do this is using a landline phone bill, a mobile phone and a healthy bank account. If you pay your bills on time and keep your accounts in credit you will soon see your score improve.
This may sound odd but the final step to restoring your credit score is to use credit. If you have shown a successful track record of accessing and paying credit, you will have no problem getting more credit. The problem is that you must be careful. Do not over extend yourself.
The majority of people with a bad credit score, have got one because they over stretched themselves and took out more credit than they could comfortably afford to pay.
Unfortunately, life is difficult without credit like credit cards, mobile phones etc. But more seriously, a bad credit score can affect your ability to get a mortgage or a loan when you really need it. Taking care of your financial reputation will stand you in good stead for your whole life and in everything you do.
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