How to Fix a Bad Credit Score Fast

Bad credit can become a huge burden on both you and your family. It can have a drastic effect on your lifestyle and, in some cases, can result in anxiety and stress about your finances.

If you have a bad credit score, fixing and improving it should be a priority. But how do you go about fixing a low credit score? Fortunately, it doesn’t require a degree in finance or accounting, and there are things you can do straight away if you know where to start.

Below, you’ll uncover how to fix a bad credit score as well as other important considerations about credit scores in general.

What is a Bad Credit Score?

A credit score is a number used to determine whether you’re able to take out a certain loan or credit amount, including mortgages and short term loans. It is based on your current financial state and previous history. When you make an application for credit, the lender will review your credit file and other pertinent information when making a decision on whether to accept you or not.

The score considers all your previous debt and repayments, letting lenders know what sort of borrower you are. If your credit score is low, you may be considered a high risk and refused a loan or offered a higher rate of interest.

A low credit score is generally considered a bad score. However, it varies for each lender. In the UK, there is no set scale or score for credit rating – it depends on the lender you’re dealing with. Therefore, although a low credit score is not ideal, there are still lenders available who may help you out with a loan – just be aware you’ll likely have to pay higher interest than those with better credit ratings.

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What Can a Bad Credit Score Lead to?

As well as getting refused by lenders, here are a few specific things poor credit can result in:

  • Refusal on loans – To reiterate the above, scoring low can result in you being refused loans, including mortgages, personal loans, and credit cards.
  • Trouble getting a phone contract – In some cases, a poor credit rating can result you being refused a phone contract. Many suppliers rely on monthly bill payments and they want to be sure you can pay the money each month.
  • Issues during employment checks – On rare occasions, a low credit score could impact your chances of getting employed. For some employers, this is a good indication of how you handle money.
  • Rental problems – If you require rental properties for accommodation, the landlord may refuse if they check your credit score and history.

While this may all sound terribly daunting, it’s important to note that these are worst case scenarios. In most cases, a bad credit score will only impact you on getting larger loan amounts and low interest rates. If you’re at all worried, be sure to seek professional help.

How to Check if You Have a Bad Credit Score

The first step in fixing a bad credit score is to work out why your score is low. If you’re reading this guide, chances are you know you have a poor credit score. However, for the ones among you who don’t, here’s a few companies to use to get an estimate:

  1. Experian – Now offering a limited free service, Experian are one of the widest known credit rating agencies. If you want a quick glimpse into your score or somewhere to monitor improvements, this is a good place to start.
  2. Equifax – Free for the first 30 days. Equifax are one of the three main credit bureaus and provide many help tips on how to understand and improve your credit score.</
  3. TransUnion – Free for life but newer and with less information than some paid services. That said, of all the free services, it offers enough detail for you to really start taking control of your finances.
  4. Clearscore – Changing the way credit scores are accessed, Clearscore are one of the most innovative in the industry. 100% free and with mobile apps packed with useful information and easy-to-use navigation systems, it’s a great place to start managing your bad credit.
  5. Totally Money – Similar to Clearscore, Totally Money are super user-friendly and offer more than enough information to start managing your credit rating. Reliable and widely used in the industry, they present you with all the information you need such as debt balances, negative factors and quick ways to improve.

If you do take out a free trial, remember to cancel your subscriptions. You don’t want to receive a nasty bill the following month. If you’re at all concerned about this, opt for Clearscore or Totally Money instead.

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How to Fix a Bad Credit Rating

Now we’ve explained what bad credit is, what it can result in, and how to check it, let’s get stuck in with some of the ways you can repair a bad credit score.

Clear Any Existing Debts

The first obvious thing to do to fix your bad credit score is to pay off any outstanding debt. This will come up when you’re applying for a new loan or credit card, and if you haven’t been making repayments your score will show it.

Look to pay off any debts you may have, or at least start making repayments each month. To make things easier, you can sometimes shift the debt onto a 0% APR card so you’re not getting interest. Money Saving Expert has a good guide on this if you’re interested.

Pay Bills on Time

Pay your bills on time. If you’re missing fixed costs like rent, mortgage, and credit card payments, your credit score is going to suffer. Missing repayments is a big red flag for many lenders so it’s important to make sure you’re keeping up. If you find you’re struggling, contact your creditors and agree a more affordable payment plan.

Join the Electoral Roll

Did you know that joining the electoral roll can actually help your credit score? This is because lenders sometimes use it to check your address and whether you are who you say you are. Make sure your address is correct and try to stay in the same address for a long period of time. This can sometimes help. Additionally, stick with the same job for a long period as this can be a sign of consistent income for some lenders.

Dissociate with Previous Financial Partners

If you’ve previously been affiliated with a partner through a joint account or similar, your credit score might be influenced by theirs, even if you aren’t still with them.

If you have a feeling your previous partner’s debt is having an impact on yours, get in touch with the credit references agencies and let them know about the dissociation. This will allow them to remove the connection which can increase your score.

Close Accounts with Credit You Don’t Need

Sometimes, lenders will use your available credit as an indication for your credit score. If you think this could be having an effect, it may be a good idea to close old credit cards, dormant bank accounts with overdraft facilities, and store cards which have spare credit on them. This will give you a better score and a better chance of obtaining credit.

Be mindful of the applications that you submit

Using a scattergun approach with credit applications can be a bad idea. If you are applying for credit try and use lenders who use ‘soft search’ technology as this will not impact on your credit score. Making multiple applications can reduce your credit score further, so do your research before applying to make sure you are giving yourself the best chance of being approved.

Use a Credit Card to Build up Credit

Getting into more debt can sound counterintuitive but it’s actually a good idea if it’s controlled. Getting a credit card and using it to build up positive credit history is an old tactic that is still used today.

Getting something like a charge card and using it for daily spending can be a good way to boost your score if you remember to pay it off every month. Just don’t forget about repayments because if you miss one you may hurt your score opposed to fixing it.

Summing it up

Having a bad credit score isn’t all doom and gloom. If you have the know-how, it’s easy to begin repairing it and giving yourself the best chance at reducing your stress and gaining access to credit.

Do remember that even with bad credit, you can still receive money from certain lenders. The caveat to this is that you’ll likely be offered a higher interest rate to balance the risk the lender is holding.

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