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When we get ourselves into financial turmoil, it can be a difficult process to know how to recover. Worst of all, even after recovering from this, many people fear that their future prospects, such as getting a mortgage, will now be unreachable because of their bad credit score. This is because lenders are wary of lending money to people who are seen as higher risk for paying back loans.
Whilst a low credit score can be limiting short-term, most credit score stresses originate from either a lack of knowledge or from word-on-the-street misunderstandings. Amongst many of the credit score misconceptions, a major misbelief is that a credit score stays with you forever, which simply isn’t the case.
If you’re currently suffering from a bad credit score and you’re looking to improve it, here are a few suggestions you can make to see an increase in your score.
Start paying your bills on time
You shouldn’t follow a ‘better late than never’ attitude. Get into a routine of paying your bills on time as soon as you can. Overtime your credit score will increase. If it is virtually impossible for you to pay your bills on time, you should communicate with your lenders, as they may be willing to arrange a payment plan that better suits your current situation.
There are an abundance of apps that give you easy access to your bills, such as WonderBill, which help you manage your bills.
Check for any errors in your credit report
You should checkall of the information on your credit report identification, your credit card, outstanding debts and major purchases. Despite the fact that errors don’t happen regularly, they have still been known to happen. It won’t help your case if your credit information is a misrepresentative of yourself.
Stop making hard enquires (if unneeded or you can’t afford)
Hard enquiries, which include applying for a credit card, a mortgage, loan or auto loan, drag down your credit score and remain on your report for 2 years. Whilst your goals in life may require the application of a hard enquiry, there is little point applying if you’re credit score is weak, as it could further damage your credit report.
Consider a credit-building credit card
These cards are specifically designed to help to increase your credit score by offering a lower spend limit. But this only works as long as you meet the repayments each month. It should also be noted that these cards usually come with a higher rate of interest as to reflect the greater risk that the provider is taking on by lending you money.