A bad credit file can make life really difficult in this current recession. More and more people are reliant on borrowing money from anywhere they can, be it through loans and credit cards, in order to live financially. Borrowing money is harder than ever nowadays so having a mark against your name for missed payments for credit cards bill, utility bills or any other financial obligation can cause severe difficulties in the future.
Something that many do, which in fact makes the situation worse, is continuously applying for credit and getting declined. The constant application for credit, especially if you are applying and you have already been refused by other lenders makes life even more difficult for yourself in the future. If you have been refused credit, the only other option may be to turn to the sub-prime market which isn’t the most ideal situation as the interest rates you will be charged are through the roof. If you feel as though you are heading for this unfortunate circumstance, then read below on ways to help you revive your credit rating without resorting to extreme methods. One of the first things you can do is contact a credit reference agency, such as Experian or Equifax, and determine your credit score and then take the necessary procedures to rectify your credit.
There are simple steps that you can take to improve your rating such as making sure you are registered on the electoral roll at your current address; making sure that all your current debts are under your correct name and address; ensuring that there are no other mistakes on your file, such as someone else’s debts or payments and lastly, shut down any previous credit agreements you no longer use. Lenders like to make a note of any stable factors in your life, for example, when filling out an application form for credit, make sure you write down your home landline number as opposed to your mobile number. Other factors such as a long employment history, a fixed place of residence and a long term history with a bank also will help you with credit applications.
Once you have checked your credit rating and score online, you can start to improve and rebuild your credit. One great way to rebuild credit is to take out a prepaid credit card. Prepaid credit cards are great if you have applied for a credit or debit card previously and have been refused due to poor credit. You do not require any identification when purchasing a prepaid credit card as you simply buy it and then load money onto it and then use like a normal credit card.
Prepaid credit cards are a great way to build your credit rating as these prepaid cards feature special benefits for those you are in need of help in the credit department. You sign up for them and then pay a monthly fee for twelve months and these payments are noted down and then sent to various credit reference agencies that will see that you are making payments on time. This will prove to them that you are handling your money management sensibly, responsibly and are credit worthy. Over time, using these prepaid credit cards will definitely improve your credit. There are several types of prepaid credit cards on the market so spend some time researching which one will best suit you.
In circumstances where you have never had credit, applied for it and been turned down, don’t despair as it is not your fault. There is a comfort amongst the credit industry about lending to people who have previously been successful in applying for credit. So if you have credit cards already or have taken out a loan, then the chances of you having access to credit is greater than someone who has never applied in their life. If you are starting from the very beginning and want to build on your credit file, think about a prepaid card as this will help you get your foot on the credit building ladder. By simply making regular payments using your prepaid card, some as little as 5 a month, you can ensure that your credit is on the right path to success!
This author is a consumer products analyst, specializing in bank cards and personal finance. He suggests reading a free thirty six page guide called the ‘Essential Guide To Your Money‘. For more information, go to the prepaid credit card website.