If you have a bad credit profile, it’s easy to feel disillusioned about the potential of getting loans approved in the future. Don’t panic – it is possible to recover from a bad credit profile and there are a number of ways to do this.
Check your credit file
It’s a good idea to check your credit file – something that is free and easy to do. Check that there aren’t any errors here which may be making your credit profile worse. If there is anything that is inaccurate or incorrect, you can request for it to be changed.
Pay bills on time
It’s essential that from now on you always pay your bills on time. Whether or not defaulting on loans or repayments was the cause of your bad credit, you need to ensure that you always pay back loans in full in the loan term agreed.
Consolidate your loans
If you have multiple loans, you might want to get advice about consolidating your loans into one easier to manage loan. Seek expert advice if you want to do this as you’ll need to consider the length of the loans and the rates of interest on each.
Simply getting all your documents in order and knowing when each of your loan repayments is due will help you to improve your credit profile. Being organised may take a while at the beginning but it’ll really pay off in the long term and you won’t regret it.
You need to be realistic about your income and your monthly expenses. Don’t be tempted to borrow more than you can afford to pay back. It’s no use hoping for the best – you need to sit down, crunch the numbers and stick to within your means. In other words, it’s very important that you learn how to budget.
Stay in regular employment
Being able to show a future lender evidence of a regular job means that they’ll be reassured you have a regular income. Try to stay in your current job for as long as possible – constantly changing jobs can raise alarm bells to lenders as your pay slips may be irregular and inconsistent.