>> Feb 14, 2014
Possessing a poor credit rating can affect your ability to borrow and prevent you from enjoying many of the things in life that others take for granted.
However, possessing a poor credit rating isn’t the end of the world these days because many lenders are willing to work with people with bad credit and provide them with the opportunity to redeem themselves in the eyes of credit rating firms like Equifax and Experian.
1. Higher insurance premiums
Did you know that possessing a poor credit rating can result in higher insurance premiums? Many borrowers didn’t either and they’re finding out the hard way.
2. Difficulty finding apartments and employment
In some countries it’s legal for landlords and employers to check applicants’ credit ratings. This could have long term consequences.
3. Limited borrowing options
You’re probably already aware of this. Possessing a poor credit rating can impede your ability to apply for credit cards, loans and finance.
4. Difficulty getting approved for mobile phone plans
Telecommunications providers check credit ratings with the aim of avoiding those they consider a risk.
5. Security deposits on utilities
Broadband internet, cable TV, electricity, gas and phone companies might charge you a security deposit if you have a bad credit rating.
To avoid problems such as these, don’t you think it would be wise to work towards improving your credit rating?
Improving your credit rating
It takes time and effort to improve your credit rating though it’s safe to say that it’s in your best interests to work towards doing so, for as you can see from the points above, life with a poor credit rating can be tough.
You’ll find there are more than a few ways to go about improving your credit rating. Of the many ways to go about this, applying for bad credit loans through a lender that specialises in such loans and then meeting your repayment obligations on time is easily one of the best; moreover, source loans that enable you to make additional repayments with the aim of repaying the loan early.
Provided that you can make additional repayments without incurring charges, here are a few handy tips for repaying your loan quickly and avoid defaulting on another loan. This might very well be your last chance to do so.
I. Increase your repayment frequency
Making an extra repayment when you can, or even better increasing your repayment frequency regularly, helps you to repay your loan faster, instil trust in credit rating agencies and helps you to avoid defaulting on your loan. Be sure to shop around for loans that enable you to make additional repayments without incurring charges.
II. Streamline your expenses
It’s remarkable just how much you can save on your ‘essential expenses’ when you put your mind to it. Give up your cable TV subscription in favour of streaming TV shows online, switch to a cost-effective mobile phone plan and if you do little besides run on treadmills at the gym, give up your membership and hit the footpath.
III. Sell your junk
It’s also remarkable how much junk most people possess that they have little to no need for. This junk can be sold and the revenue earned put towards your loan, or alternatively, put in a bank account to ensure that if you’re running a little low one month, you can still meet your loan repayment obligations.
IV. Work odd jobs
If time allows you to do so, working an odd job here and there is a great way to raise extra money to put towards your loan with the aim of repaying it faster and improving your credit rating. Apps like Field Agent have proven very useful.
V. Don’t borrow again until you’ve repaid your loan
Lastly, don’t borrow again until you’ve repaid your loan. This is likely how you incurred a poor credit rating in the first place, so don’t apply for credit cards, finance or loans until you’re completely out of debt.
The benefits of repaying your loan early and improving your credit rating aren’t only profuse, but also well within your reach when you set your mind to it.
About the Author:
Morgan Finance is a firm in New Zealand that is renowned for its fast and easy lending process. As they have no bank lending criteria, they are reliable providers of bad credit loans.