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This week, we’re looking at simple things that can hurt your credit score and what to do to boost your credit rating fast and get your finances back on track.
If you’ve ever checked your credit score and reacted a little like this:
…then this is the article for you!
Sometimes, a bad month or two — with a missed payment here or a credit card application there — is all it takes to throw your credit score for a loop.
But if you want to boost your credit rating fast, there are a few things you can do.
If you’ve hurt your credit rating by missing payments, you can…
If you’ve been missing payments, it’s more than likely that one of two things has happened: either you don’t have quite enough money to pay all of your debts each month or all of the different repayment dates and amounts have got too difficult to manage.
(It is hard having to remember what payments are due on what dates every month…)
To stop this problem from happening month after month, which can be pretty stressful and disheartening, some people choose to consolidate their debt.
Consolidating your debt allows you to borrow the amount you owe on your other debts (credit cards, loans, store cards, etc…) and pay all of them off, leaving you with just one monthly repayment of a fixed amount on a fixed date.
Not only can this make everything much easier to manage, it can also make your debt cheaper, rolling them up into a debt that has a much better interest rate. Plus, making regular payments on-time is a great way to boost your credit score fast.
Not sure whether you’d be able to borrow the money because of your credit score?
Guarantor loans are a great way of borrowing money at good rates, especially if you don’t have the best credit score in the world.
By getting somebody — usually a close friend or family member — to guarantee your repayments, you become much less of a risk to lenders. This means you can borrow more at a better rate.
To find out more about how personal loans can help boost your credit rating fast, here’s a handy article that breaks it down in more detail.
If you damaged your credit rating because of the payday loan cycle…
Payday loans seem like a great idea when you need quick cash, but it’s not uncommon to get caught in a debt spiral. People end up paying back the payday loan and its interest with another payday loan, and so on…
These debt spirals hurt your credit score, too. (Especially if you default on your debt and it gets sent to a debt collector.)
If you’re in a debt spiral like this, a guarantor loan is a great way to break the cycle. As well, you can get access to a loan with much fairer rates of interest and longer repayment terms.
That way, you can pay off your debt in smaller monthly instalments, improving your credit score at the same time.
And if you can’t borrow money because you’ve not got a credit score at all, you can…
If you don’t have a credit score at all, you’re probably thinking about ways to boost your credit rating fast.
We’ve written an in-depth article about how to boost your credit rating fast before (which we recommend checking out) but here’s a quick recap:
- Join the electoral register: This is an odd personal finance quirk, but being on the electoral register affects your credit score, as lenders use it to check whether your information (like name and address) is legitimate. If you aren’t on the electoral register, you’ll find it much harder to get credit.
- Apply for a credit-builder credit card: Credit cards are a great way to start building a good credit score, but if you have no credit history it can tricky to get accepted for one. Credit builder cards are a great place to start. They have lower credit limits, but they allow you to start a record of borrowing money and paying it back.
- Apply for a guarantor loan: Guarantor loans are a good choice if you’re looking to boost your credit rating fast and borrow money because they allow you to borrow money at affordable rates, even if you don’t have a credit score because you have somebody to guarantee the payments. Plus, regular, timely payments can help boost your credit rating fast by creating a history of responsible money management.
There’s no doubt about it, credit ratings can get more than a little confusing. And when you want to boost your credit rating fast, all the information on the internet can seem overwhelming.
But here at Bamboo, we try to break everything about credit scores and personal finances into easy-to-understand terms. If you want to get up to speed with all things personal finance, check out the credit rating section on our blog.
(And if there’s any other topic you’d like covered, just let us know!)
- Author The Bamboo Team
- Posted 7 August 2019