Alright, so you ended up with bad credit, and it’s time to turn a new page, and start mitigating the damage caused by some bad decision. The bad news is that it will not be too easy to get out of bad credit, but the good news is that it is possible.
If you are persistent and follow the suggestions in this article, you will be able to build up your credit score to a high enough level to get loan approvals for a better interest rate. So, let’s see what you can do to prove to the new creditors and lenders that you are able to handle your finances more responsibly.
Get a new credit card
There is no reason to blame your credit card for bad credit, or to be hesitant to get a new one. Sure, it would be wrong to claim that it wouldn’t be easier to control yourself, if you just removed the temptation. However, you will need a new credit card, and you can leave it at home, so that you don’t go on a shopping spree. A new credit card is essential for rebuilding bad credit – how else do you plan on creating a positive payment history.
It might be difficult to get a new credit card at one of the major banks with bad credit, but there are still options out there. A word of caution though, avoid subprime credit cards, because they have high interest rates and fees, and providers prey upon those with a bad credit score.
Additionally, don’t opt for prepaid credit cards, because you won’t be able to obtain a positive payment history from them, considering how they do not report to credit bureaus.
Start paying bills on time
The whole point of starting over is to get in line and pay the bills and fees on time. This is now more important than ever, because there are more business that use collection agencies to follow up on the account of customers that neglected their payment.
So, if even one debt collector manages to get a hold of your account, it will leave a bad mark on your payment history that sticks around for seven years. Do not allow something so meaningless to hinder all the good work and efforts you have made so far.
Adopt new habits
There is a wonderful adage that can be applied to this situation: “If you do what you always did, you’ll get what you always got.” In other words, you need to cast aside all of your credit damaging habits, and adopt some new ones. For starters, focus on the previous suggestion and don’t be late on your payments.
The next thing you should do is stop buying things you cannot afford, try to spend as little as possible. For this to work, you need to stay below your credit limit for quite some time. If you really want to buy something that you don’t actually need, just remember that this kind of behaviour got you into this situation in the first place.
Learn how to save money
Instead of getting busy spending money, you should get busy saving it. You can start by doing some research on your local stores where you shop frequently. See if they offer some sort of coupons or discounts, and how you can acquire them.
Extra cash and discounts can also be earned via different websites or apps – truth be told, you will probably have to do surveys or vote and leave reviews, but half an hour a day isn’t much and it can help you get things cheaper. Also, if you have stuff you do not need, you can sell it, provided it is in good condition. You can create an eBay account, or organize a yard sale, you can surely get some extra money this way.
See if there are any clinics that are willing to buy blood, because you get to help someone and earn extra cash this way. You can also invest in power saving items, like energy saving light bulbs; they are more resilient and drain less electricity.
You can still get by in the meantime
In case you need a loan for something, due to an emergency or any other problem, you should know that there are still people who can help you out. You can usually find providers online, but you need to make sure they are legit and reliable.
Once you find a few reliable solutions, you should take some time and compare them, to see which one of them has the most favourable conditions. You can read more about comparing loan companies and applying to ensure you get the best deal possible.
Don’t turn to money lenders or too-good-to-be-true deals
Lastly, you should definitely stay away from money lenders, also known as “quick cash” places or payday loans, because these are a one way ticket to poverty. These places usually advertise themselves as good people willing to help you out, and they won’t even bring your credit score into question, regardless of how bad it is.
These loans come with incredibly high interest rate that can go above 200%. The reason why they do not bother with your score, is because they can withdraw a payment electronically. The worst thing about this is that you can even get trapped into debt, and it will perpetually continue due to really high interest rates. It would be far better to ask friends or family for a big loan, than to get stuck paying the interest in these places.
As you can see, it takes some discipline and determination, but it is quite possible to get a bad credit score undone. Remember that patience is a virtue and that you need to demonstrate a lot of willpower to resist purchase impulses. If you really want to buy something, try to earn some extra cash to get it, since there are a lot of ways to do so, as mentioned in the article.