What to Do When You Have Poor or No Credit

Poor Credit Score

Having a poor credit score can be a huge inconvenience, and so can having no credit history. You might have bad credit because you missed some payments in the past. If you’re young, you might not have had the chance to build up any good credit yet. Both of these problems can mean that you find it hard to get loans or credit cards, or to buy things with payment plans. Poor credit can even make it harder to find somewhere to live. It’s possible that you aren’t currently affected by your poor credit. But at some point in the future, you’re likely to want to take out a loan, buy a car or get a mortgage. Start fixing your credit now to help yourself in the future.

Fix Mistakes on Your Credit Report

The first thing you should do is take a close look at your credit report. It’s possible that there are some errors you can correct. You should be able to check your credit history easily by using a service that is either free or cheap. You can get one for free from the nationwide credit companies every twelve months. Look at it carefully to see if there is anything you don’t recognize or that looks strange. If there are any errors, you can get it corrected to get your report looking healthier. You need to challenge the things you think are mistakes by writing to the credit reporting company. It’s always better to have your complaint in writing and include copies of documents to support your claim.

Get Your Finances in Order

If you have bad credit, you need to sort out the way you manage money. You might have debts to pay off, and perhaps you want to put aside some savings. You should create a spending plan to help you decide how you need to spend your money. Start by making a list of all your expenses, including any payments toward debts. Include any savings you want to make in your plan, but prioritize meeting your payments for bills and debts. Try to put some money aside for emergencies too.

Establish Credit

You might not have much of a credit history. This is likely if you’re young, or you just haven’t had the need to do anything like getting a credit card. You can start building credit through a number of methods. The first one is getting a secured credit card, which is like a prepaid card. You deposit money and can spend as much as you have deposited and it helps you to build credit. You can also use passbook loans, which are secured by a deposit. Another option is getting a credit card on someone else’s account, such as your parents.

Find Suitable Loans

It’s still possible to find loans if you have bad credit. If you can pay one back, taking out a loan can help you to establish some good credit. You can visit a number of payday loan sites to compare them with each other. Find a responsible one that cares about working within the law and protecting its customers.

Bad credit doesn’t have to stop you building good finances. Take steps to correct it if you want things to improve.