Your credit rating is something that follows you around for your entire life. If you are generally very good with managing your income and meet all your payments every month then your rating will be a very good one and you won’t have any trouble getting credit when you need it.
But we can all run into problems with our money from time to time, no matter how good we are at managing it. Even if you have everything set up to be paid on time every month, if something happened to cause a drop in income you might find you start having problems making ends meet. You could lose your job or face a significant rise in your mortgage payment that would effectively reduce your disposable income, for example.
But even if you find yourself in the unfortunate situation of having a poor credit rating, there are ways that you can improve things. For example the main step to take would be to reduce the amount of debt you have. That’s not to say you shouldn’t have any since that would be unrealistic, but if you have lots of different loans with all kinds of companies it may affect how favourably you are viewed if you need another one.
Another big aspect of improving your credit score is to make sure you meet all your payments every month. We’ve all missed a payment from time to time, and it can be for a perfectly legitimate reason such as being on holiday or simply forgetting, but this doesn’t change the fact that it will be noted down as a late or missed payment on your record.
The best way to make sure you don’t fall into this situation is to set up direct debits for all your monthly payments. This way they leave your bank account automatically and you don’t need to remember them.
You should also consider what you are taking out a loan for, as some situations are better suited to loans than others. You might take out a car finance deal to get a second hand car for example, which is an ideal purpose for a loan since you might need a four figure sum to get a new vehicle. If you already have debts on several credit cards you could also get a loan to consolidate all those, and get rid of the cards.
Repairing your credit rating is actually easier than you might think, although it will take some time to do. You simply need to start taking steps towards being in control of your finances rather than letting them control you. That way, the next time you need to fund a big purchase such as a car, you’ll be on the road to acceptance for finance sooner than you think.
Article Author: Victoria Cochrane
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Article Category: Money and Business
Article Keywords: credit rating | getting credit | poor credit rating | credit score | loan | car finance | second hand car |