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How People with Bad Credit can get Good Credit

Why do we need a credit score?

Building a good credit score or credit rating and doing away with your bad credit rating, is crucial. Especially if you are wanting to borrow money or access products such as a credit card or a loan. You are able to check your score for free and if it is not in the best shape, there are things you are able to do in order to improve it.

Different credit score ratings

So, let’s start out with answering what is considered as a good credit score. Well, there are plenty of different standards for rating credit scores. This is of course down to the fact that different lenders consider different credit scores as a good credit score. However, if you have in fact got a good credit score with one of the main credit reporting agencies, it is more than likely you will have a good credit score with your lender.

But just remember that a good credit score does not guarantee that you will be approved for credit or offered the lowest interest rates. Why you ask? Well, that is because a lender doesn’t just decide through credit score.

How to try and improve your credit score

So, how do you go about going from improving your credit score? Well, here are a few ways you can go about doing it.  Starting off with considering getting a credit building card. If you have a bad credit history, you may need to consider a credit builder credit card. What is that you ask? They are cards designed for people with a bad credit history and are trying to turn it around. The credit limits are often low and the interest rates are very high. This reflects the level of trust your credit file gives lenders.

By using these cards and paying off the bills each month, you can prove you are creditworthy. You can also improve your credit score, and apply for other cards and loans when your credit rating improves. Be aware that the interest rates charged are much higher than a standard credit card though.

The most obvious and common way to ensure that your credit score will improve is through paying your bills on time. Paying a phone landline or internet contract on time is a great way to prove to lenders that your bad credit history is improving. It shows you’re capable of managing your finances effectively.

Lastly, you should try to eliminate any outstanding debt before you apply for new credit. This is mainly because banks, building societies and credit card companies might be hesitant about lending you more if you’re currently in debt.

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