Recovering from a bad credit score can be a frustrating process. In some cases it may take years for the score to turn from god to bad. However you can be able to maintain a good credit by making conscious decisions that will see you avoid certain mistakes.
Common Credit Mistakes to Avoid
A good credit score calls for prompt bill payments. You should never miss a bill payment unless you want your score to drop. Many lenders look at your debt repayment ability from how you pay your bills. If you are the forgetful type, try setting reminders that will alert you once when a bill is due.
Maxing out your credit cards is not good for your credit score. Many lenders have this perception that people who use the maximum amount of credit they are allowed to spend are more likely not to pay their loans on time. If possible, always keep your utilization rate between 1 and 20 percent.
Not using your credit card at all sends a negative message to most lenders. How will you be able to prove how responsible you are with credit if you aren’t using any? This move might also prompt your lender to close down your account, something which will affect your credit score. With that being said, use your credit cards for smaller purchases. This will not only reflect positively on your repayment history but also keep your account active.
Financing for People with Credit Obstacles
Individuals with no credit or poor credit encounter difficulties in obtaining loans from financial institutions. However all is not lost since there are alternatives one can consider. Many companies provide online loans that specialize in helping people with bad credit.
Home owners can tap into their home equity to get a low interest and tax deductible line of credit. This can however put your property in jeopardy should you default in payment. It is an inexpensive option that those with botched credit scores should consider; only if they are disciplined enough to pay down an equity line.
Credit unions are lending institutions owned by members who have something in common. It could be a common career or living in the same area. These unions give credit to members at lower interests.
Friends and relatives can also be a lending source for those with poor credit. It is advisable that you draft a written agreement that includes the terms of the loan, interest rate and repayment period. This is to avoid future complications. Borrowing from friends and relatives should be the last resort.
Another alternative would be looking for a co-signer. This should be someone who understands your situation and knows that you are able to repay the loan. If you default in payments the co-signer will have to make a full payment. However late payments will be recorded in both of your credit records.
Using Cash Loans Wisely for Unpredictable Expenses
Cash loans come with high interest rates that can hurt your financial situation. You should only used cash loans http://www.financiallitnow.org/cash-loans.html when you have no other choice and use them for the intended purpose. Put aside what remains and save it for a rainy day.
Make it a priority to pay back your loans in time to avoid snowballing into deeper debts. Be aware of short term loans. In theory they require you to pay back after one or two weeks. But the reality is that many people are normally not in a position to pay back within such a short period of time. The loan therefore keeps on accumulating into their next pay check and in no time grows into a big debt.
The best way to utilize cash loans is to arm yourself with information on what’s best for you and what’s not. Proper planning and wise spending is the only way you can have some cash left over for unpredictable expenses.
How To Find Out What’s On Your Credit Report
A credit report is a summary of what your credit history entails. It contains information such as your personal information, credit cards, loans, debts and bill repayment status. Lenders look at your credit report before committing to lending you money. Employers can at time look at ones credit report before hiring.
Credit reporting companies are tasked with the responsibility of collecting your credit information and writing a report on it. You can get your credit report once every year.