A bad credit score can have a wide ranging impact on your finances. From being ineligible for standard personal loans and credit cards, to the interest rates you can access, there are many ways in which a poor credit score can hold you back. You could end up with your only option being loans for people with bad credit when you have an unexpected bill. However, a bad credit score is not forever – if you want to stop your credit score from getting worse then there are some simple ways that you can do this.
Pay off some of your balances
One of the most significant elements in keeping your credit score stuck is how much you currently owe. So, if you’re looking for a quick fix to stop that credit score sliding make it a priority to pay off some of your balances. You may not be able to clear any full balances – that’s fine. Even reducing the balances that you have by a little will have an impact on your overall score. Perhaps even ask parents or grandparents if they can help with guarantor loans for a short term.
If you can’t pay off balances, don’t spend more
If you’re just not in a position to reduce the amount of credit that you have then you can stop your credit score getting worse by avoiding spending more. Even if you have space available on a credit card or overdraft, don’t be tempted. Instead, reduce your spending so that you don’t have to use it and you’ll at least be able to keep that credit score stable.
Avoid applying for any more credit
Credit checks by lenders – especially if unsuccessful – can be a slippery slope down the road of worsening credit scores. Every time a lender makes a “hard” credit check against your finances this is added to your record. The more of these you have, especially the more unsuccessful credit checks that are carried out, the more your credit score will start to slide. If your account is covered in these unsuccessful credit checks you look like a credit risk i.e. someone who is constantly applying for credit and so unable to live within their means. So, if you want to make any new credit applications then limit these to “soft” checks only so that your score remains in tact.
Don’t miss any payments
Another very quick way to worsen your credit score is to start missing essential payments. These could be payments on existing debts that you have – such as a credit card – or payments on your utilities or mobile phone contract. Missed payments on existing debts and debt contracts like this will show up on your credit score. If you get to the stage where you’re being taken to court by the creditor then you could end up with a judgment against you, which will create negative credit history that is hard to escape from. So, make sure that you have money set aside to make all your monthly payments. By doing this you’ll not only ensure that your credit score doesn’t worsen but you’ll have a pretty good chance of improving it.
