We all know that your finances are super stressful right now and you might be loosing sleep over it. We know that everything is looking pretty depressing out there right now. Food prices are on the rise, energy prices are skyrocketing, and fuel is rising more reach hour. One of the issues that could really hold you back right now is bad credit if you are like me and have bad credit you will know that it can affect you in many ways.
Your credit score can be negatively impacted by a lot of different things but one of the highest reasons is that you are missing any due payments. I know exactly what this is like and make sure you are talking to your creditors to avoid bad marks.
If you’ve been borrowing more than you can pay back or staying on the edge, then this is going to hurt your score. Having no credit cards or loans is also bad for your credit history. As I haven’t been working since, I had my youngest, these are just a few tips of things that I’ve done to check that I am getting the most out of my money
Look At Your Outstanding Debt
Your debt repayments are going to be one of the first things that anyone looks at. If you are looking to get a loan, a payment plan or something similar, then this is always the first thing that people look at. Make sure that you are not paying for any unwanted subscriptions that you may have forgotten about or that you’re not still paying off items you no longer have. If you have a history of not being able to make your payments on time, or if you have applied for credit repeatedly, then the chance of you being approved is low and if you are approved then the interest will be higher causing more debt. If you want to give your credit score a boost, you need to think about how you can make your debts more manageable so you can pay them off earlier. It wasn’t an option for me, but some people use debt consolidation to help them and have spoken highly of it. I managed to cancel some random subscriptions I had forgotten about and reduce my Netflix package with no affect to the quality.
Look At Available Loans
One of the biggest issues with bad credit is not being able to get a loan when you need one and the ones that are available are super high interest rates. Bad credit loans are something that I used in the past with Provident and they can be a way of getting the amount that you need without doing something that you cannot afford. However, you need to make sure you read all the T&C’s and that you aren’t getting yourself into further trouble which will ruin your credit score further.
Understand Your Credit Score
A lot of us feel intimidated when it comes to our finances and our credit scores. I use ClearScore to help me understand mine and track the good and bad moments. It also shows my affordability score not just my credit score. It is never nice to hear you have bad credit but if you know there is an issue you can get to fixing it. Make sure you always check the report from your credit score as there can be incorrect information or issues that need to be resolved. Sometimes issues fall through the cracks, and they have not been updated on the system. Do not be afraid to challenge any of the issues, because accidents happen and when they are fixed then your score could be looking better. I have got mine up from 300 to 500 over 2 years and I have reduced my debt by facing it and paying it off and not missing payments.
Know Your Finances
If you have bad credit and you feel like you are in a sink hole constantly, then it is time to get yourself sorted. I didn’t face my issues for years and it made it worse, so I started with a spreadsheet and went from there. I checked all my outgoings, my debts, my savings, and I made a note of what I wanted to achieve over the year. You need to understand where the money has been going and make sure your payments go out on the correct date for your income. I used to be paid 4 weekly so this was slightly more difficult, so I set it for the 1st and made sure I had enough in the account to cover it. I use Monzo and this is a big help as I use the pots function to pay my bills out of a set amount. I am still not good at accounting for every outgoing expense, and I am a nightmare for a home bargains trip, so I need to improve that, but I am good with my bills so far. Change takes time, it can’t be done overnight. Factor in any debt repayments and include the interest rate as you might be able to change for better rates. I don’t drive but if you can afford to use the car less then that will help with the petrol outgoings or cutting down on your daily coffee / lunch out could help too.
If you can then make sure you identify the debts that you can pay off more quickly especially ones with high interest rates. It may also help to shop around for better rates when looking to buy a big expense or when changing services.