If you’ve just managed to sort out your debts, you will no doubt be relieved. However, that being said, you will now have to work at rebuilding your credit rating. This can take a long time and will require a lot of discipline. But in the long term, it will be all worth it, as it will allow you to have access to much better rates of interest.
Major purchases
Obviously having bad credit history can make major purchases difficult but in many cases it is still possible. If you need to purchase a car for work purposes you can apply for car finance with bad credit. This will allow you to get in a better position to make your repayments.
Fix any errors in your credit report
To start with, it’s always good to look at your credit report for any negative erroneous entries. Errors on your report – i.e. unpaid bills that were not your responsibility – can drag down your credit rating, so be sure to sort these before moving forward.
You should regularly consult your credit report to make sure no mistaken entries are made, as this can happen surprisingly often.
You never know, it could allow you to access lower rates of interest on car loans from Car Loan 4U.
Taking the first steps
Rebuilding your credit history can take a long time – roughly 2 years if you have a bad history. Improving your credit score requires a very careful handling of your finances and good organisation. The basic things to remember are:
- Avoid using your credit card on unnecessary purchases.
- Always pay on time.
- Don’t apply for new credit cards that you won’t be eligible for – this will knock your credit score every time you fail.
- Keep going – don’t expect things to change overnight, be patient and your score will improve over time.
If you can’t get credit
For those of you with a particularly poor credit history, you can use secured credit cards to help rebuild your credit history without resorting to super-high interest credit cards. Secured cards require that you put down a deposit, which in turn becomes your credit line. When you use the card, you are charged interest; however, in turn this is treated as a line of credit that can be used to help rebuild your credit rating.
Building credit history is always going to require good money management, so be sure that you can afford to use these devices to rebuild your credit scores. There are also many money management applications that can help you track your spending. Good luck!