Ways to repair your credit
Last Modified 16th of February 2021
Saddled with the label of ‘bad credit’ you probably find it difficult to run your life because life dictates that we need credit in order to survive. For example, we need a good credit score to take out a mortgage, get a mobile phone, buy a car and so on.
Every time you request a product or service, the lender will contact a credit reference agency who will provide a detailed financial profile which essentially paints a detailed picture of how you manage your finances and any CCJs, bankruptcies or missed payments you have incurred. The lender then makes a decision on whether or not to supply you based on this information.
Having bad credit has other implications too. For example, financial products such as loans, insurance and credit cards will all cost you more money if you have a poor credit rating. In addition to this, if your future plans involve running your own business, you will not be able to achieve this without having a good credit history. Therefore, if you currently have a questionable credit history, perhaps it’s about time you took ownership of the problem and made plans to change this situation.
There are a number of things that you can do to try and repair your credit situation. Firstly, access your credit report from one of the three credit reference agencies in the UK (Experian, Callcredit or Equifax) and scrutinise the report. Rectify any incorrect details which might count against you. Once you are satisfied, identify any credit cards which you may have requested but you no longer use and ask for these to be shut down. If there are any outstanding debts that you can afford to repay, do so.
One action that you can take which will improve your credit score is to take out a payday loan and repay it as soon as possible. The reason that this improves your score is because it proves that you can manage your loan and make the necessary repayments on time and in full, thus improving your credit score. The reason behind taking a payday loan and not another kind of loan is because payday loans will lend to anyone on a short term basis, despite their credit history, therefore if you do have a poor credit history, this will be overlooked.
If you have a bad credit history, it is in your interests to improve this situation as it will lead to more favourable lending decisions and terms and conditions, which will essentially make your life easier in the long run. You can do this by analysing and amending your credit report with any negative errors that you can identify, rationalising your finances by closing down unused accounts and paying off any realistic outstanding debts. Finally, obtaining a small payday loan and repaying within the required terms and conditions is a great way to improve your credit score.
About the Author: Laura Susstance is an established freelance content writer from the UK, specialising in writing financial content.