A Guideline on Ways to Redeem a Poor Credit Rating
A low income hampers your ability to be in control of your finances. To maintain some balance in your finances, preparing a budget will be helpful, as well as having minimal debts and a positive credit rating.
Damaging your chances of getting loans is relatively easy, where credit ratings are concerned. It is hard for some us to understand the extent to which we risk our credit scores. They should work towards avoiding such risks. There are however already bad situations that need fixing. You Also, need to consider how long the exercise may take. The the length of time it takes is determined mostly by the depth of the damage.
The first step to take would be to open a bank account. You are required to have this provision when you commence your rebuilding journey. It may be difficult for you to find enough cash for this purpose, but during your assessment, if one is not seen, the results will be even poorer. Having good ones with no liabilities on them is desirable.
The next activity is arranging to make payments for the existing debts. Reporting that you are bankrupt causes your debts to be written off. If your situation is not as adverse, then arranging to start payments of the amounts owed is the logical resolution. 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.
Work towards keeping the regular installments on time. This will ensure all the progress made is not reversed again. The debt collectors have a duty to report on any default payments, as well as your pattern of making payments. Your improvement efforts will gain from a positive report.
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. The immediate reaction for most people is not to acquire more credit, but getting some and having it in check will work in your favor.
When you get here, arrange to have a small 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. Friends with great credit rankings are especially beneficial, as their lines of credit will make your reports look good, thus improving your score.