Four Practical Ways to Rebuild Your Credit and Still Get By

Debt can be a challenging, and often necessary, aspect of life. If you’ve always maintained good borrowing habits, and you’ve never had to deal with sudden financial emergencies, then the chances are that you enjoy a good credit rating, and that debt isn’t something you spend much time worrying about.

But what happens when debt spirals, and your credit rating suffers as a result? How can you recover?

Let’s take a look at four worthwhile tips for getting your financial life back on track, while still meeting your day-to-day obligations.

Start With a Budget That Works for Your Reality

To begin with, you should compose a budget. This can be as exhaustive as you need it to be. Think about all of your incomings and outgoings. Categorise them, and get them down on paper. This exercise might reveal areas of spending that you can safely cut. For example, if you realise that you’re spending hundreds of pounds on fuel each month, the appeal of walking to work might suddenly increase.

Once you’ve come up with a budget that’s realistic, you might find that you can devote more money to paying down your debts. Even a consistent contribution of twenty pounds a month can send a positive message to lenders and ratings agencies.

Use a Credit-Building Card

Fortunately, there exists a range of credit cards designed for people with bad credit, which can be used regularly for small bills. If you make a card like this the basis of your grocery shop, or the way that you pay the utility bills, then you’ll drive up your credit score over time.

It’s important that you pay off the full outstanding amount each month in full. If you don’t, you’ll incur additional interest, and push down your credit score. This goes for things like motoring, too: bad credit car finance is a way to not only gain access to a new vehicle, but steer yourself toward a healthier financial life at the same time.

Pay All Bills on Time—Even the Small Ones

If your finances are in bad shape, you might feel tempted to ignore small bills. But even smaller bills can have a big impact on your credit score, especially when they’re allowed to accumulate. Make sure that you’re aware of when a payment is due, and that you avoid missing deadlines and creating a bad name for yourself.

Check Your Credit Report and Fix Errors

Sometimes, problems with your credit score can result from mistakes in the way that your behaviour has been recorded. You can obtain a free credit report from ratings agencies like Experian, Equifax, and TransUnion. If you spot any mistakes, notify the agency and get them corrected. Recent polling from Royal London indicates that almost a third (29%) of UK adults who check their reportuncover mistakes in the process.