Whether you want to start your own business, buy your own home, or simply sort out your financial situation once and for all, it can be extremely challenging to move on when you have a history of bad credit.
What exactly happens when you have very bad credit? In a nutshell, you will struggle to find credit companies that will lend you money.
Why is this?> Typically, it is because you have failed to pay back the money you owed either on time or at all, resulting in companies not feeling safe in giving you any more credit.
Fortunately, just because you have a bad credit rating at the moment doesn’t mean you are stuck with it for life. There are steps that you can take to improve your credit score and expand your options when it comes to borrowing money. Read on for more on how to move on from bad credit.
Be prepared to borrow more
It is highly likely that you will need to borrow money again at some point, probably before you have had the chance to dramatically improve your credit rating. Fortunately, borrowing more money can actively help to improve your credit score. As long as you do it responsibly, that is.
The LoanPig – bad credit loans platform is the ideal lender for someone with bad credit who wants to improve their credit rating. Offering short-term loans that have to be repaid within only four months, LoanPig gives you the opportunity to showcase yourself as a responsible borrower in a very short space of time.
Pay your existing bills on time
Payment history is the largest contributor to your credit score, so if you want to improve it, you need to show that you are committed to making timely payments. If you are prone to making late payments, it can be a good idea to set up a series of direct debits so that you don’t have to remember to make a payment each and every month.
Make sure you choose a date on which you will have sufficient funds to cover your payments, as you do not want any defaults showing up on your credit history.
Clear high-interest debt first
Although many people focus on paying off all their debts in equal measures, this is a false economy. You should always prioritize paying off your debt that has the highest interest first, as otherwise, you can fall into the trap of only paying back interest every month and never the actual debt itself.
Also, Read: Checkout Saver: An Amazing Way to Earn Cashbacks
Develop good financial habits
The last step and arguably the most important, developing healthy financial habits for the future is crucial if you want to maintain a good credit rating. Unfortunately, this is easier said than done, especially if you have had bad experiences with borrowing money in the past.
That being said, it does not mean that it is not feasible. You just need to be dedicated to making a change for the better.
Developing good money practices does not happen overnight. You need to consistently pay your bills on time, resist the temptation to spend above your means, and learn the importance of saving.
None of the above is guaranteed solutions, but if you follow the advice and commit to the changes, you should be one step closer to a great credit score and, in turn, financial freedom.