The last thing everyone can think of having is bad credit. Bad credit limits your life. You can’t buy what you want. No one will want to give you a loan or even a mortgage. Yet often we just find ourselves in that situation, not knowing even how our credit score reduced that fast. But how we got there is not as important as how we are going to fix the problem. And there are ways of fixing the problem of bad credit fast enough for your life to go on in a normal manner. Your Personal Financial Mentor gives you tips on how to improve your credit score.
First of all, start paying all your bills on time. Actually there are no shortcuts when it comes to paying bills. It doesn’t matter what other things you do to improve your credit, you have to pay your bills on time because not doing that will keep your credit scores down forever. Moving forward though, past problems don’t count much if you pay all the arrears and start staying current on your bills. So you should worry less about the past.
Although you should not do away with your credit cards summarily, try not to have too many of them at the same time. This will not only help improve your score, but it will also make credit card management easier for you. You should also keep the balances on all your credit cards low enough because very high balances affect your credit score quite badly.
One option people like to use nowadays is a debt consolidation loan. A debt consolidation loan is special kind of loan which you can take to pay off your other debts so that you are left with only one big loan rather than several. For example, if you are servicing a car loan, a mortgage and perhaps a student loan all at the same time, you can apply for a debt consolidation loan which will pay off all those loans. As a result, you only have one debt to pay- the debt consolidation loan. This will help a lot in improving your credit score as well making it easier for you to manage your loans. Furthermore, if you choose a good loan provider, you will end up paying less interest rate than what you were paying before, thus reducing the cost of your debts.
But even after taking this loan, you should remember that you are still in debt.