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Bad credit: how to cope?

Loan or mortgage

Loan or mortgage

Bad credit equals bad memories! It may have happened to you already? Perhaps you are currently in this situation? One thing is certain, having bad credit is not a pleasant situation to live. Credit is one aspect that lenders take into consideration before deciding whether or not you are worthy of being accepted for the loan or mortgage you are applying for.

The credit rating does not just reflect your recent financial transactions. It also takes into account your behavior in recent years. In order to have a good credit rating, you must be consistent in every financial move. It’s always easier to tarnish your reputation for credit than to restore it! If you already believe you have a low credit score, it’s important to take action now to get yourself out of this situation. Indeed, it’s never too late to improve your rating and correct your mistakes to put your credit on the right track. Here are some suggestions to help you.

Loan Suggestions

Loan Suggestions

  • Pay your accounts on time, as much as possible. Also keep your credit card balances to a minimum. One of the things that determines your credit worthiness is the amount of credit you have compared to what you actually use. When you keep your balances low, you show that you are responsible for the credit. On the other hand, you return a picture of good payer, because you will be recognized as someone who repays its loans.
  • Set all the small balances accumulated on various credit cards. Why? Because the amounts you owe on multiple credit cards are taken into account in calculating your credit score. Keep the balance of your credit cards as low as possible. In other words, do not use 5 credit cards, as this can affect your credit rating. Better to place all small purchases on a single card, while of course respecting your minimum payments each month.
  • Pay your accounts before the deadline. This item is a factor in your payment history and accounts for 35% in the evaluation of your credit rating. The historical part of payment is the most important component in the evaluation of your credit rating. For this reason, it’s important to stay up-to-date with your bills. If you tend to forget, find a way to remind you to make your payments. Put an alarm on your phone, a reminder in your calendar or on your calendar. You can also make an arrangement with your bank. Indeed, it is possible to make pre-authorized payments. Thus, the payment of some of your invoices will be automatically deducted from your checking account. You will not have any more worries.
  • Limit the use of your credit cards. Indeed, it can be tempting to make unreflective purchases and thus accumulate huge debts. Avoid at all costs the frenzy of impulse buying. Your expenses would quickly exceed your income. You must never forget that at some point you will have to pay! As you try to control your credit, put all the odds on your side. Among other things, get used to paying cash. Thus, you will know all your expenses and you will know how to eliminate the superfluous. At least you will know where your money is going. In other words, keep your feet on the ground and be realistic. You must learn to live within your means. To do this, use your credit cards only for large purchases or major purchases such as groceries and fuel.
  • Avoid at all costs to pay off your debts with a credit card. This is useless because you are only moving one debt to another, not to mention the interest charges you will incur. Opt to pay cash. This way you’ll have control over your budget and you’ll also avoid accumulating debt.
  • Aim to use only 20% of your credit card credit. For example, if you have a $ 2,000 limit on your credit card, try to keep your expenses around $ 400. Respect this scale. And aiming lower would be even better for your finances. Only in this way will you learn to control your expenses and limit your debts. Or at least tend to blot them out and end up totally erasing your debts. Ask your creditors for advice. Develop the reflex to consult your creditors when you know that you will not be able to honor your payments. Indeed, do not hesitate to approach the creditors when you can not pay. Once you realize that you are unable to pay your bills, approach them. It is possible to make an arrangement with them. Otherwise, the majority of creditors prefer to receive small regular payments from you, that no payments at all! This gesture will also confirm your reputation for good pay and will have a positive impact on your credit rating.

Make sure at all times to stay away from bad credit. Respect the deadlines, be up to date in the payment of your bills and settle your debts. To do this, make a realistic budget and stick to what you have budgeted. In short, keep an eye on your finances. Limit your unnecessary expenses. The more responsible and serious you are, the better your credit will become. Better to take this path, is not it? This way will take you away from bad credit!

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