
If you’ve had some difficulties in managing your credit payments in the past, then you may have a bad credit rating. It’s not the end of the world. However, don’t believe online sites claiming that they can ‘fix’ your bad credit, as there is no such thing. When you still want to live a good life but need to make a few changes, here are some ways to manage a bad credit situation.
Ask for a Payment Deferral on Your Credit Cards
If you have suffered a health-related issue or an interruption to your employment previously, then it may be possible to ask for a payment deferral from your credit card company. It depends on your circumstances whether they’ll grant it however. They may be willing to reduce your interest rate for a few months or to lower your minimum payment to make it more affordable. The former may save you money while the latter will require longer to clear the balance.
Downsise Your Car If It Makes Sense
Sometimes, you realise too late that your car is too large and overly expensive. It consumes fuel faster because of a larger engine and it’s a pain to find a parking space. If this sounds like your situation, you may wish to sell up and get a more affordable, smaller car. If you get a second-hand car and you finance it smartly, it should mean you have extra money each month to put towards your debt. Even if you have bad credit, there are still places with a variety of financing options. For example, online at sites like ChooseMyCar, you can still get finance depending on how flexible you are with what you want.
Become More Responsible with Debt
Demonstrating that you’re more responsible with money means meeting your financial payments on time. Taking out new credit is fine, as long as it’s repaid without being late on payments or missing them entirely. Your credit score and report does reflect late or missed payments. Therefore, while there’s no such thing as credit repair in the truest sense, borrowing and repaying responsibly is a good start.
Repay Debts Sooner by Reducing Spending
Getting better deals with debt is helped when you owe less of it, so reduce your spending. Also, if you have less owing, and no recent late payments, then it’s likely an improved credit rating will give you discounted interest rates on new deals too. This is because you’re now a lower risk to lenders. To reduce your consumer debt, cut back on unnecessary spending and look for discounts. By using the money saved to pay off your highest-interest credit card, you can make faster headway on the most expensive debt.
Don’t Avoid Credit Unless Your Money Is Too Tight
Anyone who has as much money coming in as going out likely shouldn’t look to borrow more until their situation improves. Taking on a second job or developing a side income can ease this pressure. If you do have spare funds, then it can be helpful to your credit rating to still borrow money. Borrowing and repaying on time provides proof that you’re a responsible borrower now.
A bad credit situation isn’t something that’s resolved in a few months. But given a year or more, steps can be taken to remedy your credit record and you will be seen as a responsible credit user again. Learning how to be smart with your finances is important.