Fixing Your Credit Score with a Credit Card
It is time to fix your credit score when you begin to find it hard to get your credit applications approved. In fact, the best thing that you would have done is by trying to maintain a good credit score. But if you end up with a low credit score, it is not the end of the world. There are ways in which you may still be able to fix it up. But doing so would take a lot of effort and may take some time.
The reason why a credit score is important for lenders is that it provides them with an assessment of how you have been doing on your past credit. Your credit score may show them how responsible you’ve been on your finances. It is a way for them to ensure that their own business in terms of providing credit to borrowers would not end up badly. It would also help them determine if you are worthy enough for the loan that you have applied for.
This will give you a pretty good idea on how a good credit score will affect your credit standing. A high credit score would provide some benefits to an individual. For one, a person with a high credit score would be able to get the best deals on a home or even a car loan. High credit scores may also even give lenders the option of offering loans with lower interest rates on their mortgaged homes or cash loans.
But when you have a low credit score, the biggest disadvantage is that most of your credit applications will end up being rejected by most credit institution that you come to. They will see you as a risky prospect to lend their money to. And if ever you do get approved for credit, oftentimes it comes with a higher interest rate. This means that you will have to pay off higher amounts than what is usual. This can also become a burden in the long run.
The best option that you have is to correct the information on your credit file as much as possible. This is generally known as credit repair but just that simple term alone can cause many people to be skeptical. The thing is, credit repair is possible, it IS legal and it is your RIGHT to be able to have only correct information on your credit file.
Remember, credit repair may sound impossible but it is easy to understand how to do this and even easier to actually take the action required to repair your credit so that you can enjoy your life by paying less interest on your mortgage and loans.
In fact, one of the fastest ways to repair your credit file is to actually have some form of credit. By actually having credit it, and using it responsibly which means keeping within the credit limits and making payments on time, you can actually boost your credit rating faster. But obviously there is the ‘catch 22′ situation whereby – how do you get credit if you already have bad credit?
Well there are a few easy answers to that question – find a lender who will give you ’some’ credit, even if it is just a low amount such as a Visa credit card with a £200 limit. Now here is the secret to using these types of card to repair your credit. First, do NOT go over your credit limit – Secondly, ALWAYS pay the amount in full, each month, that you owe!!!
By playing by these two rules the credit card will not cost you a penny in charges or interest yet the longer you use it then the better your credit score will become. What you are showing on your credit file is that although you have had problems in the past you can now manage credit responsibly and can be trusted.
This will make a massive difference to your credit rating very quickly. Within 6 months you will find that your card issuer will offer to increase your credit limit too but remember, NEVER go over your limit and never spend more on the card than you can afford to pay back when your statement arrives.
In fact, if you use the card for things like shopping or regular household expenses which you would either normally pay by cash or debit card and keep the actual cash in your bank, when your statement arrives you will have enough money to pay the balance outstanding and never have to pay a penny in interest.
There are a number of Visa credit card issuers who will give you a credit card if you have bad credit and the one I can honestly recommend is
Capital One Classic Visa Credit Cards
Capital One offers you the following features
- No Annual Fee
- Up to £2,500 in spending power
- Credit Limit Increase – Manage your account well and they’ll increase your credit limit on your 4th statement.
- A FREE choice of card design
- Spread your payments
- Free Identity Theft Service
Capital One Classic Visa is Suitable for People needing to strengthen their credit rating
- I have had little credit in the past, for example: I have an overdraft but no credit cards
- I have had credit problems in the past, OR
- I have no credit history, for example:
OR
- I have never used credit in the past
- I am a student
- I am new to the country
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