Look After Your Financial Health

Look After Your Financial Health

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Cleaning up your bad credit is like losing weight; it’s going to take a while, but it’s achievable if you set small targets and realise there is no quick fix. In fact, you should avoid any solutions that promise a quick fix, as these are most likely to backfire and leave you in worse financial trouble. Here are a few things you can do to take care of your credit score and begin building good credit.

Look After Your Financial Health
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Check for accuracy

It might seem basic, but the first thing you should do is get a copy of your credit score and see where you stand. If you spot any mistakes, for example, sometimes accounts you closed long ago are listed as open, then you should call the credit bureau and have it corrected immediately. You might have to provide evidence of any mistakes, but most of the burden of proof is on the creditors. If they can’t corroborate that the information on your report is accurate, then the negative items must be removed from your account. Make sure you always keep your information up to date, as this could save you many headaches later.

Set up repayment reminders

Paying your credit card bills on time will go a long way to helping you reduce your debt. If you can, take advantage of the payment reminders that some banks offer. You could also set up automatic payments from your personal account to your creditors.

Pay off as much debt as you can

Paying back some of your outstanding loans and credit card bills will go a long way to improving your score, and it will also help you save money for the things you find more important. This first thing you need to do is get a copy of your credit report so you know exactly where you stand. Once you’re familiar with your situation, you can begin to make a realistic repayment plans. For example, you could find the best way to pay off a car loan early, and eventually free yourself from the grip of debt.

Leave old debt on your report

Clearing your debt from your accounts doesn’t mean you should clear it from the credit report. Debt that you’ve managed to deal with and clear off is evidence of a good credit history, and it shows that you can be trusted to follow through with repayments. You don’t want this to come off your history.

Apply for credit you’re likely to get

Although an improved credit score will give you more loan options in the future, you shouldn’t go crazy and apply for multiple loans with high repayments. There are smarter ways to build up good credit.

Apply for a credit card with high interest, but only use it to spend small amounts. By doing this, you can show lenders you’re a responsible borrower by clearing the balance every month and not being charged interest. You need to do this for about six months.


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