‘Challenge yourself!’- It indeed sounds silly. You might be wondering why to challenge yourself if life already has countless challenges to face.
Building credit score in the right direction is itself a major challenge. It takes years to establish a clean borrowing record. ‘One mistake can ruin everything’ approach works in terms of credit score. Once you missed making the repayment on time, your credit score starts fluctuating. In some cases, you may gain a tag of a bad credit borrower.
Having a credit score, which is not satisfactory according to the lenders, seems like a rock in your way of accessing a loan. In fact, you may face inconvenience in chasing the great deals on the loans. However, it really does not mean you are completely out of luck. There are ways to find the best loans for bad credit. And there is no doubt that online hunt is the best way to seize the loan on feasible terms.
Wondering what is the challenge? No accessing a loan is not the challenge you have to give yourself. The challenge is about boosting your credit score. Of course, taking out a loan is not sufficient to address the issues that cause bad credit. You have to add a lot of efforts to get your credit score back in shape.
Here are 3 frugal challenges that you should take if you want to raise your credit score fast:
1. Reduce Your Credit Utilisation
Your credit utilisation in the form of loans or credit cards can put an extra burden on your ability to repay. High credit utilisation is a signal that you may have unmanageable debts which in turn cause you a poor credit situation. Try to keep your utilization rates below 25%. And this is the hard and fast rule to start with. Avoid unnecessary borrowing and you will indeed win the first challenge.
2. Repay Your Bills Responsibly
Achieving a low credit utilisation rates on your loans and credit cards is not enough. You have to stick to your budget and after that, paying off your bills responsibly will indeed help you boost your credit score. Keep an eye on your balance and make sure you pay the utility bills as well as credit card bills on time. This way you are one step closer to your aim of improving your credit score.
3. Remove Erroneous Information from Your Credit Report
There is no denying that accidents happen. Sometimes lenders and credit bureau add the information to your credit report which is not correct. This will no doubt affect your credit score negatively. Of course, it is not your fault and that is why you should not bear this erroneous information in your credit report. Here what you can do is to get a copy of your credit report and check out the information that you do not recognise. Contact the credit reference agency immediately and fix the errors on your report.
If you are ready to take the above-mentioned challenges, then you will indeed realise that bad credit is not a long lasting situation. Of course, rebuilding your credit score takes time and it is easy to get frustrated. However, you should not give up as it is the only feasible way to improve your credit record.
If you still get discouraged, think about the benefits of having a good credit score. This way you can encourage yourself. Once you have built a good credit score, you will be able to get the loan at favourable terms. Before you establish a good credit score, it is necessary to have good financial habits. This way raising your credit score tends to get easier.