What's the state of your current credit report? Sometimes when you have a blemish on your financial history, you can't fix it immediately. It can take time - as long as five years in some cases1. In these situations, you'll need to carefully manage your finances.
What could count in your favour is your reaction to finding out you have bad credit.
Just because you're working on a credit slip-up from three years ago doesn't mean you need to stress about it. A default on your credit report only says so much about your ability to repay a loan and get a new line of credit. What could count in your favour is your reaction to finding out you have bad credit. To do this, request a copy of your credit report today.
How to manage your finances when you have bad credit
As much as it might feel like it, bad credit isn't the end of the world. It's one small part of a narrative that lenders will consider when making a decision about providing you with credit, but it is still important to keep a firm grip on the situation.
When you find out you have a bad credit report, act immediately. The faster you act, the less stressed you need to be in the long run. Start making the minimum repayments for any major debts, and if you have outstanding bills, clear them as quickly as you can2. Ring the provider who listed the default and set up a payment plan and show that you've made an effort to start clearing your bad debt.
Making the minimum monthly repayments is, as the name suggests, the least you should do. Missing these payments can be included on your credit report, and that can be further evidence lenders can use to reject your application for a loan2. If you make consistent payments against your bad debt in order to pay it off quickly, you will be proving that your financial situation is more stable, and lenders won't see you as a risk.
Stressing about a bad credit report is fruitless. Figuring out the best way to pay off your bad debt is much more beneficial. The sooner you get that process underway, the better. For more help with your credit report and working toward a clean bill of financial health, contact My Credit File today.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.
1. MoneySmart. Credit reports. Accessed May 2017.
2. Finder. What to know about bad credit. Accessed May 2017.