Exposing the myth of ‘bad credit’

By | December 28, 2011

The term “bad credit” is one that is thrown around often. It might make you think that a poor credit score is something that you will have for life however, it is actually something that can be improved on. There are several ways you can transform your poor credit history into a good credit score over time.

Certain lending companies have schemes in place specifically for individuals with a poor credit history. Such schemes usually require you to make frequent payments, perhaps on a weekly basis, as a way of proving that you are indeed trustworthy. Once you have completed a certain number of payments on time, the lender will pass this information on to the Credit Bureaux who then amend your score accordingly. This is all part of the process of rebuilding your credit score and proves that improving your credit score is possible!

Another way to improve your credit score – as simple as it sounds – is by paying your bills on time. It’s easy to forget a mobile phone or electric bill here and there, but late fees aren’t the only downside of untimely payments. Paying your bills late can actually cause your credit score to decline over time. To avoid this issue all together, you can consider having all bills taken out of your account by direct debit. This way you can ensure that all of you payments are paid on time.

One of the leading causes of a poor credit score is outstanding credit card debt. You can improve your credit score by paying off your outstanding credit balances as efficiently as possible.

Finally, one of the major myths of “bad credit” is that it’s an entirely accurate account of your payment history. This isn’t always the case as poor credit scores can often be caused by inaccurate information so it’s a good idea to review your credit reports to see if they contain errors. Any errors you find can be removed which can be an instant boost to your credit score. In addition, simple things such as making sure that you are on the electoral role and closing any bank accounts that you don’t use can also help to increase your credit score.

If you have resigned yourself to living with the stigma of “bad credit” you now know that there is in fact a way out. Some companies offer specialist loans for people who have a poor credit score, these are commonly known as Bad Credit Loans. Taking these loans is one way you can help to improve you credit score, as repaying them on time could mean that you are accepted for larger amounts of credit in the future.

To summarise, paying bills on time, ridding yourself of credit card debt and correcting errors in your credit reports are all ways that you could transform “bad credit” into a good credit score.