Wouldn’t it be great to have a good credit score welcoming you each morning when you sit at your kitchen table enjoying coffee, the newspaper, your personal statements, and the day’s agenda? That will obviously be. However, to most people, it may not be the case.
Credit score and credit history have always been vital points in one’s financial records. You must keep it updated and ensure the score does not ‘fall’. If it does, you may have to deal with extra financial complications, such as paying more money for penalties. In this post, we can help ourselves with a bit of information, which can keep us geared to avoid the bad credit trap.
- Automate Your Payments
You might be wondering if it is that important. You do keep track of things. Why would you employ something extra to make sure your payments are done on time?
Well, the very factor of time itself can serve as the answer. You may have reminders set for making payments such as grocery and utility bills, credit card fees, loan instalments (if any), and other payments. However, missing one of them can result in a higher interest rate. Your personal finances may experience an imbalance. Don’t you think automation can save you from the hassle of extra penalties and an unorganised financial life with its presence? The answer is it does come in use.
- Speak to your bank or provider about automation services or facilities. If it has the option, do subscribe to it.
- There are mobile and desktop applications to help you set automatic bill payments too.
- Set automated payments from your bank account. Or you may do it from your paycheck.
- Make automatic loan instalment payments to your lenders according to the order the repayments are set. However, calculate how much you have to pay per interest demanded by different lenders (in case there is more than one debt).
If, however, you have fewer funds to pay bills for a short period (say a month or two), then use a payday loan. You can repay this kind of loan using your salary. No credit check hassles come into the picture as long as you are transparent with your income details. You can find payday direct lenders in the UK online and can also take the money out that way. You’ll find more on this loan later in the post.
- Evaluate Debts
You might have been suffering from debt. Many might go through the pains of more than one debt. That’s normal. if you stay organised, you won’t have trouble managing them at all.
However, because of the towering rate of debt or the high amounts included, you might lack organisation. In this phase, you have to sit down and relax. Collect all your papers and bills; evaluate the loan instalments; keep a clear record of the data and repay your lenders in time. A little organisation can make things simple and comfortable.
- Consolidate Debt Smartly
Debt can make the situation pretty difficult. It screws your credit score up. If you have debt, then your credit score might already have fallen down in recent times. Not repaying your lenders or stretching the repayment term can make the problem more difficult.
- The smartest way to pay a debt is to make larger payments and finish them as soon as you can. It is known as the debt avalanche method. In this method, you make the largest payment possible for you to make. Then, you gradually lower the payment amount until you can write the debt off. It works splendidly as it keeps your lenders relaxed too. They might help you with a longer repayment duration for the remaining amount of the debt.
- A good idea to manage debt is to get the new debt to manage the old one. It works great if you want to repay multiple debts. In this regard, the best thing you can do is to take out unsecured debt consolidation loans for bad credit from direct lenders. You can repay all your previous lenders with one debt and get a single repayment term and interest, which simplifies the new repayment and helps you save a little money.
- Although the reverse way to these two mentioned processes is sometimes used, mostly it depends on the nature of your debt, the term length your lenders are allowing you and, of course, the amount of money you have taken out. Known as the debt snowballing method, you need to make smaller payments at first and then gradually increase the number of repayment instalments to get the debt written off.
- Let a Payday Loan Help Manage Bad Credit Issues
As a matter of fact, it does. To know that, you will need to invest yourself in knowing how a payday loan works. It is easy t understand it. In fact, it is quite a popular loan to repay as well.
As its name suggests, a payday loan is a personal loan that you can take out anytime using your payday information. It basically means you are taking a loan out, showing the lenders your salary. Using your salary, you can repay the loan within a month or in a few weeks. A few borrowers may choose to extend the term to a few months or a year. Since your income s involved here; payday direct lenders in the UK can offer you money with a soft credit score.
Now that you know that a payday loan is one of the fastest loans and that it has no credit check hassles, you can term it a solution to bad credit. Taking it out can repay your credit card or other debts, which adds good performance to your credit history. If you can manage to repay this loan in full amount on your next payday, you can get a boost in your credit again. For most people, a payday loan can be used as a financial tool to solve poor credit issues.
- Increase Your Income
Of course, it is difficult for you to increase your income at the time you are suffering from debt. Nevertheless, a little boost in earnings can help a lot.
You can offer your employer to work for some extra time. Or you can choose to freelance/work part-time. Many people teach what they know and do their best. You can try looking for contractual work. One might also try starting a business as a side hustle.
Also read this : Important Facts to Know About Bad Credit Loans in the UK
To Conclude
You might need to consider what you have learnt in this post. Not all of these ways might be perfect for you. Go through your personal and credit situation and financial status. Then devise a suitable plan to keep things in shape.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
