4 Surprisingly Simple Ways To Rebuild Your Credit

By BankBazaar | August 27, 2017

Bad credit can never be good news. It is one of the primary reasons why people all over the world toss and turn into the wee hours of the morning. It goes without saying that a healthy Credit Score or credit report could also have a positive effect on one’s mental health.

In fact, why don’t you check your Credit Score right now? It just takes a few minutes and it’s completely free.

Check Your Credit Score

How Bad Credit Can Affect You

If you’re under the impression that bad credit isn’t that big a deal, well you better think again. Bad credit can affect you in a number of different ways, and it sure doesn’t make for pretty reading.

  • If you have a bad credit history, you can kiss your loan applications goodbye. Whether you’re applying for a Personal Loan, a Home Loan or even a Car Loan, a bad credit history can completely disrupt your plans of borrowing money.
  • In fact, bad credit can do a lot worse to your reputation than merely thinning your chances of getting loan approvals. It might make it extremely difficult for you to get a rental apartment. No one likes to rent out their property to people who seem financially unstable.
  • Bad credit also means that you have an unstable job history. You just don’t last long enough at one workplace and that could reflect on you negatively. Before even considering your job application, employers are likely to dig deep into your credit history. A red flag there could mean a lot of trouble for you. You may even have to say goodbye to your dream job.
  • If that wasn’t enough, bad credit also exposes you to risk and hence insurance companies categorise you as a high-risk individual. This, in turn, leads to higher insurance premiums.

Additional Reading: Keep Your Credit History Clean

If that doesn’t convince you that bad credit is akin to having a proverbial albatross around your neck, then nothing will. However, if you’re looking to redeem yourself, then here are 4 surprisingly simple ways you can rebuild your credit like a boss. Yup, lucky for you, a bad credit history can be fixed. All it takes is a little time and discipline on your part.

Let’s hop right to it.

The first step to making amends is to identify where you’re going wrong. It’s time to go into ‘rewind’ mode and check your credit history. Your credit history is almost like a snapshot of all your financial dealings over the years, which makes it extremely useful when trying to find out where you went wrong.

Go over your credit report with a fine-tooth comb and pin point instances that led to the accumulation of bad credit. Trust us when we say it could be a real eye-opener. Also, if you notice any fraudulent activity in any of your accounts, now is the time to get them fixed.

Additional Reading: 10 Myths About Credit Score And Credit Report

  • Do You Like To Play Catch?

Irrespective of whether you do or you don’t, you definitely need to catch up on any outstanding payments. Your credit payment patterns speak a lot about the way you handle your finances. If you have a lot of dues, it may not be possible to clear all those payments at one go (unless you’ve won a lottery or located a pot of gold at the end of a rainbow).

If your outstanding debt is fairly substantial, you can always ask your creditors for help. There’s every chance they could help smoothen the process for you as well as for themselves. It might require a fair bit of planning but it’s well worth a shot.

Additional Reading: 4 Ways You Can Ramp Up Your Credit Score In 2017

  • Pay On Time. Whether You Like It Or Not.

Make a conscientious effort to pay all your bills on time. If you’ve been lethargic in the past, now is the time to shake off those cobwebs and knuckle down. It may be hard at first, but with time you’ll get a hang of it.

And we aren’t merely talking about your Credit Card bills. Regardless of whether it’s electricity, water, gas or telephone bills, you must always strive to pay on time. In order to rebuild your credit, the first thing you need to do is analyse your payment history. If you see constant patterns of missing or late payments, you might want to reconsider your behaviour.

A great way to tackle the issue of inconsistent or late payments is to automate them. By automating your payments you won’t ever have to worry about missing any payments in future, nor will you have to worry about further damaging your credit. Sounds like a definite win-win situation!

Additional Reading: Digital Bill Payments In India

  • Think Twice Before Closing Those Credit Card Accounts

Unless it’s absolutely necessary, refrain from closing those Credit Card accounts. Why? The golden rule to a great credit history is a long credit history. Even if you do close all your Credit Card accounts, make sure you maintain a record so that you have proof.

Follow these simple steps and you can boost your Credit Score in no time. Meanwhile, why not try some great offers on Credit Cards?

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Category: Credit Score Money Management

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