The smartest place to move when you have bad credit is forward. So what is the modern day definition of ‘bad credit’? Basically, when your individual credit report is into the red, meaning it has negative listings attached to it such as late repayments, writs, defaults, judgements, bankruptcy or part 9 agreements etc, this kind of listing can remain on your file from anything from 4-6 years if you do not take the appropriate action or take the correct management steps toward seriously cleaning your credit.
Manage Your Bad Credit
Step 1 is to be in the know. Familiarize yourself with every aspect of your credit file, know it inside out and that way you will be in the best position to act fast and act decisively in choosing the right credit or loan product to suit your present circumstance. In addition you will also learn exactly what is causing the bad credit report and be able to formulate a long term action plan toward steering a clear pathway back to financial freedom. By law you are permitted to request a free copy or a duplicate of your credit report once every twelve months or in the event of being declined for a credit application. It should be made available to you in approximately 10 days or less or there is also an option to pay a marginal fee for an express copy.
Step 2 is to do your research on who are the right people to talk to in regard to finding a bad credit option or loan package that fits in with your current set of financial circumstances. However don’t be too eager. Take the time to sit down and discuss your options, let the lending centre team assess every little detail, no matter how big or small, of your particular situation before you make any rushed and or final decisions. Another trick is to be three dimensional in your thinking and in your examination of how you can improve your bad credit issue, the bank or lending centre can provide a certain amount of answers and solutions though for a complete overhaul it may be that you need to look at your spending habits and budgeting skills and moderate, adjust the way you are managing your finances. Without good management strategy even the wealthiest of people can run themselves into bankruptcy and of course they often do.
Step 3 is to increase your incidence of bill payments through your bank account and win back lost confidence by making all your payments in full and on time. Once a cycle of vigilant payment action is identified the chances of being accepted for a line of credit or bad credit loan will increase gradually but exponentially. It is 100% legal to set up extra payments, perhaps of a slightly smaller size than your standard bills, and keep a strict record of payment dates, stay on top of your game and surprise yourself with the results. In addition, when you receive a line of credit or overdraft allowance etc, start to analyse your credit utilization ratio, meaning never spend up to the maximum limit, if possible aim to maintain the outstanding balance vs total credit limit at no higher than 30%, that is for every 10 dollars credit you are permitted don’t let the outstanding balance go over 3 dollars if you can help it. This will condition your credit file in a positive fashion and before long the negative listings will subside and eventually clear.
Step 4 is to resist the temptation to close accounts or cancel credit cards that you are not currently using, actually it is good for your credit rating to have one or more cards in your possession that are not being continuously maxed out. You could use it every now and then to keep the account active while demonstrating moderated and selective spending. In the best case scenario you would keep credit cards for two or more years without ever hitting the limits. That will translate well for your improving credit file.
And finally Step 5 is to avoid payday loans at all costs. In some countries regulations have been put in place to forbid advertisement of payday loans over the internet. The reason being it is quite common for a repeat borrower who may make five or six transactions over the course of one year, to in fact pay more in total interest fees (and penalties) than they actually borrowed in the first place. This practice, unsurprisingly, is seen as rather unethical as it clearly takes advantage of a consumer in a vulnerable moment. There are a whole range of credit options and tailor made loan packages that the modern lending centre can provide you without hitting you where it hurts. Do your research, play the percentages and you too can manage your bad credit like a boss!