Bad credit? What to do to fix your credit rating

In February 2017 it was reported that people in the UK owed an average of 1.524 trillion in unpaid debts. With a lot of this debt being too large to repay, it has caused people to go into debt and resulted in households going into the red zone when it comes to their credit scores. Although this can be quite a daunting experience, there are a few things you can do to ensure you get back into the green. Have a look at a these tips provided to assist with gaining a better credit rating.

Check for mistakes

Checking for mistakes on your credit report may seem like the most obvious option, but a lot of the time this is something that many people don’t do as some people tend to accept that they owe a debt and give up. Even the smallest mistake could save you money, so it is worthwhile going over your report with a fine tooth comb and looking for any incorrect payment details, mistaken payment defaults or judgements (new and old), and any errors with your personal details. Errors with your personal details can have a huge impact on your credit report, particularly if you have been mistaken for someone else.

Debt Consolidation

Debt consolidation is one of the most popular ways to erase debt. By combining multiple debts into the one, you can lower your interest rates and pay just the one monthly repayment rather than multiple. There are multiple debt consolidation loans with no collateral for those with bad credit that assist in raising credit scores as well as helping with those unpaid debts that seem to be piling up. However, if you do find yourself in masses of debt it is important to look at your spending habits and consider what areas can be cut back.

Start maintaining good credit

One of the most important aspects of turning your credit score around is to start maintaining good credit with providers. The first step to doing this would be making sure you never spend more money than you earn on your credit card. By linking your earnings to your credit card you are paying off any spendings you may have occurred without letting your account go into negative and creating higher interest rates for yourself. Late payments towards utilities and credit providers only result in bad credit, therefore these should be avoided if possible. Taking out unnecessary credit only adds to those higher interest rates.

Watch your money

Watching your money and spending carefully can help you become more aware of where it is going and if there are any regular unnecessary costs that can be cut. Cutting unnecessary costs helps save money and allows you to become more responsible for where your money is going.

Although debt can feel like a burden, following these steps can fix your bad credit rating and turn it into a good credit rating whilst ensuring a financially secure future. There’s no point waiting for it to fix itself, because it won’t happen.