What They Don’t Tell You About Fixing Bad Credit

A bad credit score is not the end of the world!

Debt accumulation and credit utilisation are all too common, not only in our nation but also globally. 

Certain financial missteps lead people down the road to poor credit scores. For example, maybe you maxed out your credit cards for an urgent spend or couldn’t pay your bills on time due to a personal crisis. Regardless of the reason why your credit score took a beating, know there is hope. You can certainly rebuild your credit one step at a time.

If you’re suffering from poor credit, don’t panic. Remember that you’re not alone and that it can happen to anyone. 

However, in case of emergencies where you’re strapped for cash, it’s best to first look for the right bad credit score loans, deal with your emergency, and then focus on rebuilding your credit scores. 

Regardless, rebuilding your credit score should be at the top of your priority list and being aware of what it takes to get a good line of credit is the first step. 

If you’re struggling to rebuild your credit, then read this article that highlights the 5 important things no one tells you about fixing bad credit.

1. Rebuilding Good Credit Can Take Time

Picking up the pieces and starting to build your credit from scratch doesn’t happen overnight. Building credit takes time and effort, but it is well worth it if you want good credit and better credit offers. However, there is no quick fix for this process.

The time taken to build back credit differs, and there’s no fixed time frame to go by. Take a good look at your current credit report and check the issues that need to be addressed. It’s best to build your credit brick by brick, taking it one good credit habit at a time.

2. Diversifying Your Credit Mix Can Improve Credit

There is good reason behind the adage, “Do not put all your eggs in one basket.” Diversifying your credit portfolio can help improve your credit score over time. Having different combinations of credit types, from credit cards to mortgages, shows that you can manage multiple credit products responsibly.

3. Registering to Vote Impacts Your Credit Score

When looking for ways to build credit, the simplest of steps often get overlooked. Getting listed on the UK’s electoral rolls is one such step. It’s a surefire way to convey your stability and reliability to the lenders. 

Why is it important?

Lending companies use the electoral roll to verify information about you, such as your identity and residential address, to ensure the loan application is not fraudulent. This is called a ‘hard credit check’, a process lenders carry out each time they receive a credit application and is added to your credit file.

There’s a good chance that lenders might reject your application if they don’t find you on the electoral roll or if your details don’t match up. Post refusal, if you try and apply to another lender, they’ll likely see the hard credit check status on your file and reject your application. This vicious cycle of hard credit checks and application rejections can cause irreversible damage to your credit scores.

You can fix this by registering yourself on the electoral roll with all the necessary details. This will not only boost your credit score but also make it easy for you to apply for loans later on. 

4. Borrowing with a Bad Credit Score

It may seem like a very difficult situation to get out of, but there’s always light at the end of the tunnel. Some online and non-institutional lenders have dedicated platforms to give leeway to first-time and/or poor credit borrowers in certain specific scenarios. 

Certain credit products are designed to extend a helping hand to individuals as well as small businesses owners with poor credit ratings. If the circumstances are right, you can make the most of borrowing from lenders who look beyond your credit scores. 

Keep in mind the terms and conditions these lenders impose, as you will want to double-check the fine print before accepting the offer.

5. Your Partner or Flatmate’s Credit History Can Wreck Yours

Living in shared accommodation like a flat or a house with a friend or a partner is great for splitting bills and expenses. However, if both or all are named on the electric, gas, or broadband bills, your flatmate or partner’s credit history can affect yours.

Through co-scoring, a financial link can be created on your credit records, creating a shared credit history. When lenders search your credit history before processing your application, they can look into your linked financial history together with your flatmate or partner. Your application can be turned down if they’re not happy with what they discover on your shared credit history.

For all purposes, it’s best to keep your finances separate from your partner’s or flatmate’s, especially if they have a poor history. If you already share a financial history and you’ve split or moved out of the accommodation, remember to delink your financial history with them. Additionally, you’ll also need to ask credit reference agencies for a notice of dissociation.

In Conclusion

Financial errors resulting in bad credit scores don’t have to haunt you for the rest of your life. You can get back on track by taking one step at a time to rebuild a good line of credit. 

Understanding what your credit report says, making payments on time and in full, staying below your credit limit, and spacing out your credit applications are some other factors to consider when rebuilding bad credit scores.

Start today and get your credit score back on track!