Your credit rating is something you likely don’t give much thought to – that is until it suddenly starts to affect your life negatively. Poor credit can affect your ability to apply for a bank loan, get a mortgage, finance or lease a new car, get a credit card, and even affect your chances of renting an apartment/condo/house. It’s most certainly not something to take lightly, and not something you want to ignore and hope it sorts itself out over time.
The good news is that there are steps you can take that will improve your credit, and help you start to build it afresh once again. It will take time, but in the end, these essential steps will pay off.
Get a Print-Out of Your Credit Report
The best place to start is by getting a print-out of your credit report and reviewing every item in detail. Most people would be shocked to see how many errors can appear, and old debts that have been paid but are still showing up on the report. You want to be sure it is accurate so your true credit rating can be calculated.
Prioritize What Needs to Be Paid First
Now it’s time to prioritize your debts. Which ones need to be paid down first? That doesn’t mean you stop making payments on the other debts; it just means you’ll be paying more than the minimum on the top priority ones. Those with the highest interest rate should always be paid down first.
Do Not Miss Any Payments
One of the worst things you can do to your credit rating is to miss payments. Make sure you are paying your bills on time. If necessary, use a reminder app on your phone, or set up automatic payments through your bank.
Apply for New Credit
Once you start to make some headway, catch up on all payments, and bring down debt, you can apply for new credit. The idea isn’t to use this new credit, rather it should just be to re-establish your credit.
What If You Need Cash Fast?
A common question from those with bad credit is what happens if you need cash fast? Let’s say an emergency bill or expense happens that you hadn’t budgeted on. How can you pay for it? You can’t turn to the bank for a traditional loan, and you may not even have a credit card, or at least not one with a large enough credit limit.
This is when bad credit payday loans can prove to be the perfect solution. This is meant to be a short-term loan that gets you out of an immediate cash jam. The fact that you have bad credit won’t affect the approval process, so you don’t have to worry about that. Typically, you’ll be able to borrow between $100 and $2,500, and the borrowing terms will vary.
It Can Be a Long Process
The final tip is to be patient; just like bad credit doesn’t happen overnight, the same can be said for good credit. Just stay consistent with your efforts and it will pay off.