Life happens; we lose our jobs, fall sick, or something unexpected happens that gives a hard knock to our credit rating.
Or perhaps a bad credit ran up over the years is hurting the chances to either secure a loan or take out a credit card.
There’re personal loans for bad credit one can leverage to: dig themselves out of this financial hole; rebuild credit ratings; even boost credit score by up to 100 points.
Listed below are some proven strategies to rebuild a bad credit rating:
Decide to get on top due bills
For me, this is a critical component of the plan to building up a credit-worthy score. The reason for this is simple, missed payments with their adverse effects stay on credit reports for seven years – this massively cuts an individual’s chances of getting approval for a loan or credit card. Hence, it’s essential to start countering their impact right away; and the only sensible and sustainable way to do that is by running up positive marks by paying off due bills on time.
Of course, implementing this strategy alone, wouldn’t get the credit rating up fast enough. However, when combined with the other methods; one can expect to see improvements in their rating in no time.
Scrutinize credit report for errors
According to a report on CNBC, about 5 percent of consumers have wrong credit entries that are bad enough to affect their ability to obtain an insurance or financial product; and nearly 1 in 4 reports contain errors that could significantly impact the credit scores.
It has been shown that removing an unflattering entry from a credit report can boost the rating to jump up by few points.
So, check credit reports to catch any wrong entry. Thankfully, every consumer is entitled to a free yearly report from the three major credit bureaus. Apply for the report from these agencies; compare them to uncover mistakes; then dispute those errors to get them removed.
This is a quick way of boosting creditworthiness; it takes about 30 days to see the improvements in ratings once the errors have been removed.
Get debt management service
Hiring a personal finance counselor at this point is an effective means to develop a financial plan on how to pay back the debts while also boosting credit rating. Though personal finance counselors require a service fee, their expertise comes in handy when negotiating with creditors for reduced interest rates on loans.
Leverage the expertise and experience a personal finance counselor brings to the table to create a roadmap on how to get out of debt while paying lower interest.
Honestly, this should be a last resort. Declaring bankruptcy carries a stigma, but in all honesty, it could also provide the needed lifeline to start on a new slate to rebuilding battered credit history.
However, keep in mind that the bankruptcy entry stays on a report for up to 10 years, but once this time elapses, it shouldn’t count against you again.
So, there it is. These strategies above have been proven to boost credit ratings by several points within the shortest possible time.