A common misconception made by those with poor credit histories and bad credit scores, is that there are few options available to them that will enable them to live a simple and straightforward lifestyle. While it’s true that securing financial assistance for home improvements or a new mobile phone contract, for example, can be more challenging if you’ve demonstrated poor money management skills in the past, or have been the victim of fraud which has impacted your credit rating, it’s certainly not impossible.
If you’re struggling with the effects of a bad credit score, there are many ways you can improve your chances of being accepted for loans and other forms of credit. From working to improve your score to making use of companies that are dedicated to working with those with poor credit histories, there is no reason you can’t enjoy a normal life. Here are just some of the ways you can easily improve your financial status:
* Improve Your Credit Score
The most effective way of tackling a bad credit rating is to improve your credit score, making you a more attractive investment to lenders and increasing your chances of approval. According to credit experts, a good rating is considered to be a score of 700 or more, which is what you should be ultimately striving for. You can improve your credit score by keeping up with debt repayments, demonstrating good money management skills, and protecting yourself from fraud.
* Non-Status Loans & Poor Credit Service Providers
Shifting trends have meant that non-status lending and poor credit goods and service providers are back in business. In the past, many people turned to payday lenders which were financially risky due to their exorbitant interest rates, but with the government capping interest rates that payday lenders can legally charge, these types of operations are dwindling, leaving a gap in the market to be filled by dedicated businesses committed to helping those struggling financially.
* Prepaid Credit Cards
If you’re struggling to secure a credit card, ask yourself if you really need one. It’s reported that 63 percent of the 18 to 29 population don’t have a credit card, opting instead for alternative payment methods including debit cards and prepaid cards. Prepaid cards are growing in popularity, particularly amongst those with poor credit ratings and poor financial histories, as no credit check is required to be issued with one.
Research suggests that nearly two thirds of the under 30 population have used a cosigner for a loan in the past, and even more are aware that cosigning is an option available to them should they require financial assistance. ‘Borrowing’ the good credit rating of a friend or family member is a good way to secure financing, but keep in mind that this debt will be present on the cosigner’s credit report, and any missed payments will directly affect their credit score.
* Peer-to-Peer Lending
26 percent of London’s tech community anticipate peer-to-peer (P2P) lending to be the UK’s fastest growing industry in the coming years, as more and more of us move away from the formality of traditional banking, and seek out more informal financing options. While those with poor credit histories have a lower chance of acceptance, the more relaxed nature of P2P lending means that acceptance is more likely than through high street banks.
Harry Price is a freelance writer from the south coast. He lives in a small village with his wife and 3 dogs and in his spare time, he paints landscape portraits inspired by his coastal surroundings.