Can Your Bad Credit Rating Get Better?

Improving your bad credit rating is like losing weight. Both seem impossible and take time but with a little effort you can do it. It is a myth that you can fix your bad credit history with small and fast tricks. These will most likely backfire in the future and then you will be right back at where you started from.

Why Is Credit Rating So Important?

The reason why your credit card rating needs to be pristine is because it is what qualifies you for the loan in the eyes of the lender. The record serves as your history that how much money you have spent and how you repaid it. It gives the lender an idea on how much he can lend you, at what interest rate and till what period of time.

How Your Credit Rating Falls

Negative rating can appear on your credit card record out of nowhere. Situations, which you least expected are the ones that usually affect your credit rating. Below are some situations, which can affect your credit card rating:

  • When you have one or more existing debts
  • Late payments on credit cards, mortgages, electricity or gas bills, personal loans, etc
  • When you have been served by the court
  • When you apply for more than two credit cards
  • When you open an account and do not use it
  • When mistakes appear on your credit card record
  • Not having an electoral registry (Lenders use it to verify your true identity)
  • If you are a guarantor to someone’s loan who has bad credit history

How to Turn Your Bad Credit Rating to Good

The first thing you need to know is that blacklisted credit rating is a myth. Though a bad credit rating usually remains on your record for about seven years, a mistake on your credit rating can be fixed in sixty days. All you need to do is challenge your company for a check and ask them for a copy of your credit record. This copy can be bought for £2.

That being said let us focus on how you can fix your bad credit rating:

No More Credit Cards

Despite what people say, opening several credit card accounts does not improve your rating. This is because you get access to more cash and then you start spending. Focus on fixing your primary credit card record. Once you have tackled that then go for another account but just one.

Pay the Bills on Time

Late payments on bills does not just cause you a small penalty, it also goes onto your credit record. So, set a reminder and pay your bills on time.

Apply for a Credit Builder Card

Banks issue credit cards that improve your credit rating when you pay back the balance. These cards have usually high interest rate but with a steady job and proper budgeting you can benefit a lot from it.

Spend Less

An average person utilizes about 66% of his/her credit card, which is how they get bad credit rating. Having a credit card does not mean that you spend freely. Utilize your credit cash about 30% and you will see the change yourself.

Perhaps the best way to improve your credit score is to get rid of your debts. Lenders trust borrowers whose previous debts were paid in full and within the due date. Once you fix your errors and mistakes, you can fix your credit card rating.