If you have applied for credit in the past and been knocked back because of a poor credit score you may worry that you are stuck in a rut that you can’t get out of. Growing up and becoming an adult brings with it many complex challenges alongside the joyous moments. One thing that does continuously crop up is that in order to achieve quite a few things in adulthood, you need good credit.
Those people with adverse credit, or indeed no credit at all, can fall foul when it comes time to seek finance to purchase a car, apply for a mortgage on your first home, or take out a personal loan to help kick start a business. There are certain financial products, such as payday loans that can be taken out without the need of good credit, and they can be useful when chosen from a respected and responsible lender, but here we take a look at how you can slowly rebuild your credit score and build a strong foundation for the rest of your life.
It might take you some time to achieve your goals if you already suffer with a poor credit history, but there are options for you.
The first thing to consider is ways in which you can easily increase your credit score without overstretching your budget and means. Credit cards can be used to purchase your regular weekly, or monthly grocery shop. If you have a budget that you stick to for this very matter, use a credit card to buy the shop, and ensure you have the right amount of money to pay the full amount off by the end of the month. A short-term payday loan can work in a similar way, providing you with cash in the short-term, that you know you can pay off in full when you are next paid at the end of the week or month. By showing you are capable of making regular payments to repay a credit card or loan, it will help you look good in future when you are applying for a larger loan or mortgage.
Take a look at your credit report, which you can do for free by contacting one, or all, of the credit bureaus. Experience, TransUnion and Equifax, all provide you with a thorough credit file. Check for mistakes and ensure that everything is in working order. If you spot something that is wrong, let them know in order to rectify the mistake. Another simple measure to help your credit score is to register to vote at your current address. Mistakes and discrepancies such as this can leave a little niggling fault on your credit file.
Make a strict budget for your monthly outgoings, including rent, utility bills and the aforementioned grocery shop. Your credit score will be damaged if you are late or miss payments of bills. By setting a strict budget and sticking to it you can ensure that all of your bills are paid on time each month, which will go a long way to demonstrating that you are a responsible borrower.