A Guideline on Ways to Redeem a Poor Credit Rating
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. Many of us do not know the damage we constantly inflict on our credit ratings. They need to put some effort towards eliminating these risk factors. There are however already bad situations that need fixing. You Also, need to consider how long the exercise may take. The the level of damage is directly proportional to the time it will take to restore your positive score.
Opening a bank account shall start off the process. It is a basic requirement in rebuilding your credit score. There will be a shortage of funds to send to the account, but not having one will cause alarm during assessment by the relevant authorities. 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, however you are simply in a bad financial situation, then it is important to begin clearing those debts on your accounts. You are especially at an advantage if you can pay off a debt with one payment, as to shall get a significant discount to it. 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. You want your report to remain positive.
The next step is to get a credit card. Since you credit is poor, your viable option is to get a secured credit card. They are issued once you have some collateral either at your bank account or a deposit towards the same. Using the card in a responsible manner, while ensuring the repayment is frequent and timely, will be good for your ranking. People fear credit at this juncture, but they are advised to have a little of it and be prompt with payments, which will better their score.
Once you have followed these steps; you should next ask for a loan. To improve your score, you shall have to maintain your regular payments. Asking for a small sum and doing proper payments is ideal.
You can also go further and request a friend to authorize you to be in charge of one of their lines of credit. Accounts with good credit scores will help out your case, when they are reported under your name.