At any time, a series of events can occur and set you back financially. These financial setbacks can have adverse effects on your credit, making it difficult to survive. You start to miss payments, you have debts go into default, and you might start racking up debt on credit cards in order to survive. Even if you can start to pull yourself out of your financial hole, the damage to your credit score may already be done.
Pull yourself out of the bad credit pit
If you have fallen into the bad credit pit, you need to start pulling yourself out. This is process that doesn't happen overnight. You have to be dedicated to hard work and making financial sacrifices. If you continue to struggle with your finances each month, this process will be even more difficult. Your ultimate goal should be to replace your bad credit with good credit! Try some of the following methods to gradually build your credit again.
Pay on Time
Be sure to pay all your bills on time. Delinquent payments show up on your credit report.
Look at your Credit Report
Check out your credit report. You can view this report for free once a year. It is important to check it to make sure that there are no mistakes on it. It may also show you infractions that you didn't realize you had.
Pay Down Credit Cards
If you already have credit cards, reducing your existing credit card debt will help improve your credit score. A high credit card balance (and missed payments) show that you borrow more money than you can afford to pay back.
Get an Installment Loan
An installment loan is a loan that is paid back over time. If you are able to take out an installment loan and make the payments, it can help boost your credit.
Banks tend to not give installment loans for small amounts of money, and if you have poor credit you are unlikely to qualify for an installment loan from a bank anyway. There are legitimate places that will work to assist people with bad credit get a loan. Interest rates tend to be higher on installment loans for those with bad credit. High interest rates, unfortunately, will be a trend until you are able to improve your credit score.
If you do qualify for an installment loan and intend to use it for building credit, it is vital that the payments are made on time. The goal is to show that you are dependable and can make payments on time. If you are unable to do this, then getting an installment loan will hurt you, rather than help you.
Get a Secured Credit Card
A secured credit card is a credit card that requires a deposit as collateral. If you do not have credit cards already, you may want to consider a secured credit card. Once you have a secured credit card, it is very important to make sure that the credit card reports to one of the three major credit bureaus. If it is not reported, then it will not affect your credit score in any way.
Your credit limit on a secured credit card will depend on what your deposit on the card is. Your limit will not be more than the deposit you put on the card. These cards will have high interest rates and will also have multiple fees. However, if you put a small amount on the card and pay it off each month, eventually your credit score will improve and your secured card can be turned into an unsecured card.
To learn more, contact a company like Las Vegas Finance with any questions you have.
Share