5 Easy Tips to Deal with Bad Credit Score
Wednesday, January 3, 2018, 6:00 PM | Leave Comment
Even though not too many people have a terrible credit score, there’s quite a lot of them who have what is referred to as bad credit score.
According to PCI, any credit score that ranges between 580 and 619 is qualified as a low credit score. If you fall under this category, there’s no need to despair, since there are ways you can deal with your bad credit score.
Here are 5 of them that might just help you escape your bad credit score and increase your chances of obtaining a loan.
-
Don’t pay your debts late
Paying your debts late is probably the worst thing you can do when you’re trying to improve your credit score.
That’s why it’s very important that you understand that your credit score is all about your ability to pay all of your debts on time.
Fail to do this, and you’ll find yourself having your score drop even more. What this means is that you won’t be able to get a new loan and you’ll have fewer business opportunities.
Therefore, you’ll have to put some money on the side at the beginning of every month and use that money for repaying your debts. The amount of money you’re left with is to be considered your monthly budget.
-
Make your mortgage and car loans a priority
Another important thing to mention is that you should make paying your mortgage and repaying your car loan a priority. The reason behind this is that these tend to count for a large amount of your credit score.
Mortgages and car loans are usually much bigger than some other types of loans and usually they last longer as well.
Not only this, but paying off such a large debt is a great way for you to demonstrate your ability to repay a loan.
And there’s no need to say that repaying a car loan is always going to count more than repaying a cell phone bill.
-
Use only one credit card
Many people believe that when they want to improve their credit score they have to ditch credit cards completely.
But the truth is – you can use a credit card and still have your credit score improve. The trick is to only use one credit card and always keep it above the limit.
In fact, this can actually help you improve your credit score. This can be done if you get a new credit card and pay off your balance the very moment you get the bill.
Once you make this a routine, you’ll start to see your credit score improving just the way you wanted it to.
-
Apply for a bad credit loan
When you apply for a new loan, most of the lenders won’t be ready to provide you with a loan if you have a bad credit score.
However, there are companies that offer bad credit loans and can help you out when it comes to improving your score.
What’s so great about turning to one of these companies is that you don’t have to worry about your past, even if you’ve declared bankruptcy.
Getting one of these loans is another chance for you to demonstrate that you can repay your debts so make sure you use it wisely.
-
Consolidate your credit card debt
We’ve talked about getting a new credit card and using it to improve your credit score. But what to do when you already have a lot of credit card debt?
The trick many people went for is once again getting a new credit card and using it to pay off all of your credit card debt.
And if you’re wondering why, just take a look at it this way – having more than a few credit cards with a lot of debt is going to make you look like a high risk when applying for a loan.
On the other hand, if you only have one credit card loan and you’re repaying on time, you’ll be more likely to be approved for a loan.
As some experts say, bad credit is 50% bad habit which means it’s something you can get rid of. Start with the tips we’ve listed above and you’ll be on the right way to improve your credit score.
Throw us a like at Facebook.com/doable.financeAuthor BIO
Dan Radak is a marketing professional with eleven years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.
