The Biggest Problem With Bad Credit, And How You Can Fix It?
Your credit rating is something that is going to affect lots of things in your life.
However, what credit ratings actually mean and how you can influence them can be confusing! Take a look at these commonly ask questions to find out the biggest problems you can get from bad credit and how you can fix it.
What is a credit rating?
A credit rating is where a financial company will take a look into your financial history to asses how likely you will be able to fulfill financial commitment, based on this history.
Why is this important?
This is important because having a GOOD credit history will mean you will be more likely to be able to make payments on agreed loans. For instance, when you take out a car on finance, you have set agreed payments each month. If you have a BAD credit rating many companies, consider you less likely to be able to make these monthly payments.
What does bad credit mean?
A bad credit rating means that you are less likely to make any payments you have previously agreed to. This means that you are more of a liability to the finance company, as they may lose money or have to impound your vehicle.
How did I get bad credit?
Having a bad credit rating can be for a number of reasons. Young people often struggle with having ‘no credit rating’ because they have never had a phone contract or anything similar, so have not been able to build up a credit rating. If you have ever been bankrupt, entered into an Individual Voluntary Arrangement or had a County Court Judgement made against you, then you will have a bad credit rating. If you ever are in a bad financial situation, it is always better to be upfront with the facts and contact your lenders as soon as possible to ask for advice and help than repeatedly miss payments with no explanation.
What does having bad credit mean?
Having bad credit means that you may not be able to take out loans and you may be turned down for schemes like mortgages, credit cards or phone contracts. It also means that you may not be able to take a car out on a lease.
Most importantly: How can I fix it?
Fortunately, bad credit does not last forever! All negative information on a credit report is wiped after seven years (ten years for bankruptcies). In the mean time you can make sure you pay all set payments on time and if you are struggling, contact your lenders.
There are lenders who do consider those with bad credit, for example, Ultra Cars consider everyone, even people with bad credit. We may have the perfect car lease scheme for you!