Only bad news in financial life is expected when you are in a very bad credit situation. CCJ and bankruptcy become your identity and the whole life seems to get out of your control. No, this cannot be your destiny; yes you made some big mistakes in the past but your future should not be the victim of the past. The situation looks quite impossible but at least, you do something in the name of improvement.
1. Do not repeat your mistakes –
The prime reason for degrading in credit ratings is the delay in payments. Maybe not all but for some obligations pay on time. Make a budget, do some adjustments and try to repay on time. This may need you to make some big changes in your lifestyle but do that, it is for your own good.
2. Take a specialised loan product –
Specialised loan products are specifically designed to help people with certain issues. For instance, the very bad credit loans with no guarantor and no broker are short-term loans with a high-interest rate. Very bad credit borrowers take these loans and try to repay on time to earn a boost in their credit rating.
3. Stick to the CCJ or bankruptcy agreement –
In case you have a CCJ or bankruptcy case against your name, then follow the terms of agreement word to word. However, the impact of such things (CCJ, bankruptcy) stays for 6 years on your financial records but that does not mean you stop working for improvement. Despite the embarrassment of these things, credit reference agencies notice and note the good things in your financial behavior.
4. Close all the unused financial products and come out of the mess –
An unused bank account, credit card, store card, mobile contract, etc. absorb your credit rating. Did you know that? If yes, then fine if no then take a look at all of your financial commitments and disconnect yourself from every financial product that you are not using anymore. These things unnecessarily affect your financial records. This is something that is not only beneficial for very bad credit situation but also for good credit situation.
5. Get on the electoral roll –
Already due to very bad credit, finance companies have no reasons to trust you. Why make it worst? Get your name registered on the electoral roll, it tells about what you are, where do you live. In fact, this is the first place where all finance companies go to know about a person while processing an application for a loan, bank account, etc.
6. Disconnect yourself from financial partners –
Maybe your credit score was bad but became prone to worst credit rating because of your financial partner.
What? Didn’t you know that the credit rating of your partner could affect your financial records? If you have a joint loan with a person, who carries a bad credit score or worst credit rating then your credit score performance to gets affected. Leave such commitments as soon as possible. Why carry the bad doings of others?
7. Check your credit file after regular intervals –
Credit reference agencies take your financial information from many finance companies. This may cause some mistake and one small mistake can leave a huge and bad impact on your records. The same error can take place from your side. Suppose you mentioned your address wrongly and that small mistake can affect your credit rating. To avoid both the situations, check your credit file after regular intervals and see if there is any wrong information. If yes, then get it removed or rectified.
8. Do not pay the minimum amount on obligations –
Paying a minimum acceptable amount for an obligation can make the lender assume that you are struggling hard in finances. For instance, do not pay the minimum amount for a credit card, pay the complete due amount of monthly instalment.
It is necessary to get rid of very bad credit. Even bad credit situation is manageable but very bad credit scores are destructive. For bad credit there are several loan products even with guaranteed approval, for instance guaranteed payday loans for bad credit. However, with very bad credit you have to make some improvement first.
Keep working as a journey in a very bad credit situation is long and bumpy. Efforts for a long time are necessary to get the desired destination of upgraded credit score.