Improving difficult credit situation
For those of you who deal with borrowing money and all types of credit services building up a good credit history is very important. Things are okay as long as your credit score is high enough but what to do, if the figures are far from being satisfactory?
There are ways to improve the situation and this is what we are going to discuss now.
To begin with, let’s try to understand how the whole process works and how you actually make your credit score low.
There is such a thing as your loan file which contains information about whether you are a trustworthy client or not.
The data contained there goes right to your credit record file. Plus, there are details about how many credits you have, the aims of the credits and so on.
In other words, the entire information about your «debts» and how good at paying them off you are.
This is how a bank makes decisions about the sum of money to lend, the percentage of the interest and other details concerning your possible loan. The most influential information is the recent one.
For example, it you paid well let’s say four years ago, it will not count in case you were not good at paying a year ago.
If you have had problems with paying on time recently, the interests which banks impose can be significantly higher.
Thus, the score of your credit does have impact on your opportunity to get finances from a lender.
For this reason it is a good idea to look at your score from time to time in order to improve the situation, if it starts to go not that well.
Remember that each credit agency obtains different pieces of information about borrowers. However, in most cases they collect information about your name, address, applications, financial relationships with relatives of friends, payments which you have missed and so on.
In fact there is no such thing as a credit score which is flawlessly perfect. Various agencies have various indicators here. Nevertheless, if your «rating» is high at one of the main agencies, you are much more attractive as a client.
Note that even if you pay your debts well, there is no guarantee that you will get a loan or you interest rates will be low. The bank’s decision does not depend on scores only.
To find a precise answer to this question it is a good idea to inquire about details at one of the credit agencies.
Improving a Bad Situation
Well, is there any way to make things better if your credit history is not good? In fact it is a long term process, negative aspects live for years but quick improvements still can be made.
First of all, visit the electoral roll. If you register there, it will be much easier for you to get a loan. Be attentive. Even if you make a slightest mistake in your address, it will cause you troubles.
Paying bills matter too. It may sound as a surprise but if you pay for telephone or Internet services on time, lenders will be more friendly to you.
Remember that if you have a joint a loan with your wife or friend it can also affect your situation, in case this person’s score is low enough.
Another important indicator is changing the pace where you live too often. It is a bad sign for creditors since they consider it as an attempt to slip away from paying.
Another way out is to get yourself a card which is known as credit builder. They are made specially for people whose loan situation is bad. If you use it regularly and pay your bills without delays, you have a chance to prove yourself as a trustworthy client.
In this case it is important to remember that the interest rates are significantly higher in comparison to standard terms.
Calling Out for Help
People who have problems with their financial situation often apply to credit repair companies. It is a bad idea because most of them will try to make money out of your problem. As a result, you will undergo wastes again and again.
In most cases, they will charge you for nothing. They typically offer you to get your loan file. Then, as they promise, they will look through mistakes and inform your agency about them.
However, it is free! You can do it all by yourself. Some companies claim that it is illegal but it is not true. Do not let them deceive you.
In case you have already obtained such a file and found mistakes on it, let your credit agency know about them. It is a good decision because you will have the mistakes actually fixed.
Plus, you will build yourself a good reputation. It takes about a month to consider your application, to remove a mistake or to inform you that your application is declined.
As Bad As It Can Be
In case you have faced a situation when your credit situation is so bad that you have been marked as «Victim of impersonation», there is still a way out. In fact just follow almost the same route as we have already described in the paragraphs above.
One thing to remember! If you get to check a loan file and you see this mark there, you should not be scarred. This is just a kind of indicator. It shows that you are not quite trustworthy but it is just a legal procedure which is necessary.
The good news is that it does not have any impact on bank’s decision. Even if you have seen this indicator, you still can hope to get a sum of money. However, it will cause you delays when getting a sum of money from a lender.
Thus, when you getting a credit having a low score as a client, there are still ways out to improve the situation. It may be not that simple and takes some time but it can really help you. Just be patient and attentive enough so as to check every mistake and make your situation better.