A bad credit report can make it extremely hard for you to access any form of credit or financing in future. That's because lenders will often examine your credit report whenever you apply for any type of financing. A range of reasons can contribute to a bad credit rating. Missed repayments, bankruptcy, debt agreements or loan defaults that may be a result of a change, such as the loss of a job, in your financial standings are some of the aspects that will contribute to a bad credit rating. However, you don't have to live with the consequences of a bad credit rating forever. There is a way to fix your bad credit, especially if you have a new job or source of income. Here's how.
Obtain a Copy of Your Credit Report
Knowledge is key when it comes to dealing with a bad credit rating. You need to be aware of what caused your bad credit in the first place for you to identify the best approach to correct it. Credit reports are usually managed by credit reporting agencies. If you are finding it difficult to find the agencies online, an accountant will be able to guide you in the right direction. Keep in mind that the credit reporting agencies often deal with different lenders as well as service providers, so it would be best to obtain your credit report from all of them.
Your credit report may also contain some mistakes that will affect your ability to apply for financing. Therefore, examine your credit report carefully, and if you notice any mistakes, notify the associated credit reporting agency in writing. Remember to include supporting documents such as financial statements as proof of the errors.
Remedy Your Defaults
The next step after reviewing your credit report is to clear all your arrears and outstanding debts. This is usually the case if your bad credit was caused by unpaid debts or missed payments. Therefore, liaise with the service provider or lender and establish a repayment plan or, if you have the ability, a lumpsum payment to settle whatever is outstanding. Remember, however, that before you start remedying all your defaults, draw a budget that will ensure you don't struggle with your payments as well as your own upkeep. Visit a local accounting office for more help you with that.
Start Paying Your Debts and Loans on Time
Once you settle all your defaults, develop a habit of repaying any loans and debts on time moving forward. Doing this will help build and maintain an excellent credit record.
Share14 May 2018
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