We hear a lot of talk about credit scores these days. Having a bad one can cause you some real problems, and it isn’t that difficult for your score to go down. It might not necessarily be your fault if your credit score is low. Perhaps you ended up in some financial trouble and struggled to make loan repayments. It doesn’t take that many missed payments to make your credit score plummet. The majority of borrowing options are based on your credit score so you will have trouble taking out a loan or a credit card, but that doesn’t mean that there’s nothing that you can do. There are alternative borrowing options, and ways to increase your credit score. If you are stuck in the trap of bad credit, here are a few ways that you can get out of it.
Is My Credit Score Bad?
Most people aren’t aware of exactly what their credit score is. It isn’t something that appears on standard bank statements, so you’ll need to find it out for yourself. Some loan or credit card statements may have your credit score on them, but not all of them will. There are plenty of online services out there that can tell you your credit score for free. However, these free scores are not always the same as the score that a lender would base their decision on. They are usually fairly accurate, but if you want an exact score, then you might need to pay for one. Another common issue, particularly amongst young people, is not having a credit score at all. If you have never borrowed before, then your score will be zero. Some banks will be reluctant to lend to somebody that has no proven record of making loan repayments on time.
Can I Still Borrow?
Borrowing when you have a bad credit score is difficult, but it isn’t impossible. If you can, you should always try to increase your score, but you don’t always have the time. In certain circumstances, you might need to borrow some money in a hurry. A broken down car, unexpected home repairs, or some other emergency, won’t leave you with enough time to increase your score enough to get a traditional loan. Instead, you will need to look at alternative borrowing options. Some of you will be lucky enough to have family or friends that can lend you some money, but if not, then look into unsecured personal loans. You can still get good rates for an unsecured personal loan with bad credit. This is a good option if you need a bit of extra cash in a hurry, and paying it back on time will also increase your score.
How Do I Increase My Score?
There are companies advertising a credit repair service, but the truth is, you don’t need them. They won’t be able to do anything that you can’t do for yourself, so using them is just a waste of money. The first thing to do is to get a credit report and go over it thoroughly. It isn’t unheard of for companies to make mistakes on the report. There may be accounts that aren’t yours, or payments that have been mistakenly reported as being late. Any errors can be disputed, and if you can prove yourself, they will be wiped from the report, and your credit score will go up. The next step is to pay off any outstanding accounts that you may have. Once you have paid everything that you owe, your score will improve again. Finally, you should try borrowing small amounts and repay them immediately. Find a credit card that you are eligible for and make small purchases, for example, the weekly grocery shop, and then pay it off straight away. That way you can prove that you are trustworthy and bring your score up.