Don’t Let A Bad Credit Score Hold You Back
Your credit score is your license to spend. It’s affected largely by your ability to pay bills on time, the amounts of debts you have and your ability to keep your personal details on financial records updated. If you keep missing payments on bills, have lots of debts and have different accounts under different addresses, it’s likely you’ll develop a poor credit score.
Having a poor credit score can restrict you from spending money as freely – you may be unable to privately rent or even take out a phone contract due to your score. That said, a bad credit score doesn’t have to be entirely debilitating and you can work around it and build your score back up. Here are just a few ways to cope with a bad credit score.
Search for companies that specialize in bad credit
Many lenders and insurers will reject you if you have a bad credit score. Getting rejected can harm your credit score further, so you want to avoid approaching anyone that could reject you. Your best option is to focus on using creditors that specialize in working with bad credit customers. You’ll be surprised by the options that are out there – you’ll find loans for bad credit and credit cards for bad credit. The only downside of using these specialist companies is higher interest rates, however you may be able to eventually refinance these debts once you’ve improved your credit score.
Consolidate your debts
Having lots of different debts can damage your credit score. Consolidating your debts into one single debt could help to improve your score as well as making your debts more manageable to pay off. There are consolidation loans out there designed for this purpose. Be wary that these consolidation loans may have high interest so you could end up paying more in the long run.
Start paying all bills on time
Improving your ability to pay bills on time could also help to improve your score. In order to start meeting those regular payments, you’ll need to start budgeting more effectively so that you’ve always got enough money in the bank for when bills go out. It’s worth making some big cutbacks as these will allow you to budget more easily. You could try cutting down on driving and walking more often so that you’re spending less money on fuel. You could also try cancelling subscriptions that you rarely use – these could be gym subscriptions or streaming platforms subscriptions. You may also be able to start cooking meals for less by using cheaper ingredients and using leftovers. All of this could help you to budget more effectively so that you’ve always got enough money to pay your bills on time.
Look into credit builder schemes
Your bank may offer some form of credit builder scheme that could help you to improve your score more quickly. This could involve taking out a small loan from your bank and proving that you can pay it back over the course of a year – if you succeed in meeting your monthly payments, your bank may put in a good word to creditors every time you get a credit check so that you’ve got a much better score.
Use a credit counselor
You may also want to consider hiring the help of a credit counselor. A credit counselor can help give you tips to deal with your score and improve it. They can also often be used to negotiate terms with creditors – if a landlord has rejected you based on your credit score, a credit counselor may be able to help argue your case. Credit counselors may also be able to talk to creditors and negotiate lowered interest rates on debts or lower rates on bills so that you’re able to more easily make these payments on time. You can search for credit counselors in your area online.