Remedies for a Bad Credit Score
When you earn a small income, you are bound to have a hard time controlling your expenses. To maintain some balance in your finances, preparing a budget will be helpful, as well as having minimal debts and a positive credit rating.
When it comes to credit scores, it is not that hard to make considerable harm to your borrowing potential. Most people have no idea how much they frequently put in jeopardy their credit ratings. They should work towards avoiding such risks. There are however already bad situations that need fixing. You also need to ask yourself how long it will take to rebuild your credit score. This duration is dependent mostly on the extent of the damage.
A the logical starting point is opening a bank account. This forms the basis of the whole rebuilding exercise. You may not have a lot of money to deposit in that account, but when assessors are looking into your already poor situation, lack of an account is detrimental to your fate. The more solvent accounts you hold, the better.
You then need to start the process of settling debts you have on your credit. Normally, the declaration of bankruptcy results in the dropping of most of your debts. If your situation is not as adverse, then arranging to start payments of the amounts owed is the logical resolution. It is better for you to strive to pay some o the debts in one go, as this will earn you big discounts on them. Once you are at a stage where you have either cleared them or are regularly paying their installments, you can now begin actively promoting your credit score.
Your installments depositing needs to be made well before time. This safeguards all the progress up to that point. The debt collectors have a duty to report on any default payments, as well as your pattern of making payments. Them reporting positive patterns goes a long way in helping your case.
You should then acquire a secured credit card. Since you credit is poor, your viable option is to get a secured credit card. You are furnished with one after depositing an amount to your account as security. Responsible use of the card, with regular and up to date repayments, will impact positively on your credit score. While the instinct would be to avoid credit entirely, obtaining some and keeping it under control with ensuring positive progress in your rating.
After arriving at this stage, you then need to get a small loan. To improve your score, you shall have to maintain your regular payments. The best to go about it is to request for a small loan, then pay for it on time.
You can also go further and request a friend to authorize you to be in charge of one of their lines of credit. If their credit patterns and score are impressive, having them reported under your name will greatly improve your standing.