A bad credit record affects many aspects of one’s life like the inability to qualify for a home or vehicle finance. In many countries, a bad credit record affects your chances of employment. The good news is that a bad credit record does not have to be the end of your world, there are some things you can do to repair your record, yes it may take some time to clear it, but it can be done.
ARRANGE A PAYMENT PLAN WITH YOUR CREDITORS:
* If you are unable to continue with your monthly installments, call each of your creditors and make a payment plan.
*The payment plan you make must be suitable for both you and the creditors in that you must be able to see a decrease in your outstanding debt after payment.
CREATE A BUDGET:
*Buy your monthly groceries using a grocery list and stick to it.
*Pay all your household necessities, and see how much is left after payment, then pay all your other outstanding debt.
* A budget disciplines you to curb your spending and to ensure that you spend on necessities instead of luxurious.
TRY TO GET A CONSOLIDATION LOAN:
*A consolidation loan is a large amount of cash that you can borrow either from the bank or legitimate micro lenders, you use this loan to pay all your other outstanding debts.
* Then focus on paying back just that loan.
KEEP ONLY ONE CREDIT CARD:
*There is no need to have 10 credit cards because chances are you will be tempted to use them all.
*Use only one credit card and only for emergencies.
MAKE A FOLLOW UP WITH THE CREDIT BUREAU AND KNOW WHERE YOU STAND:
*You may find that you repaid an outstanding debt in full, but you are still listed as a bad payer.
*Keep track of why you have bad credit and as soon as the debt has been fulfilled, make sure you make a follow up to have that account removed under you.
PAY MORE THAN THE STIPULATED INSTALMENT:
*If your instalment is $10, try to pay $12. Paying a higher instalment rate will ensure faster payment of your debt, and it will reduce your interest rate.
DECLINE GRACE PERIODS:
*Creditors will tell you that you can take a break from paying your installments at certain periods of the year, don’t do that. It is a bad financial decision.
PAY YOUR BILLS ON TIME:
*Late payments are the one thing that show up on people’s credit profiles, and that makes you a bad payer, pay your bills as per the agreed date.
DON’T APPLY FOR DEBT REVIEW:
*Debt review ensures that your creditors don’t take legal action against you, but going on debt review reflects on your credit profile for years to come.
AVOID EXCESSIVE CREDIT CHECKS:
*Every time someone or a company checks for your credit score, it lowers your credit rating, so twice a year is more than sufficient.
Contact the HMRC helpline to help you with your tax report. You will never have a clear credit record if you are owing on your tax.