We help you in Consolidating your Debts

The ability to develop and maintain an A1 credit rating is not one that can be created overnight as it involve a lot of carefully thought-out actions or practices, reliable financial advice and hard work. When it comes to retaining an excellent credit rating, many people seem to be quite oblivious of the dangers involved until perhaps it’s too late. Some individuals don’t even consider the impact of poor repayment history when they try to apply for credit. This is quite dangerous for your financial future!

Being saddled with a poor credit rating is however not the end of the world as we know it. What individuals need to realise is that once your credit score is damaged, it is time to start looking for intelligent solutions to your financial problems. There are many things you can do (or not do) to improve your credit score or maintain an excellent one:

1. Maintain an excellent repayment history. Paying up your credit card debt or loan promptly accounts for maybe 35% of your credit score. You have to make sure that your loan or credit card payments reach your creditors on or before the date due, at ALL times!

2. Make regular payments on your debts even if it’s simply the minimum payment. Not making your credit card or loan repayments as agreed is a giant crime as far as your creditors are concerned! Once you start defaulting on your loan, your credit status begins its downward crash down.

3. Never ever exceed your credit limit! Doing so is a daring act of financial irresponsibility as far as your lenders are concerned.

4. Spending every available credit on your card also is quite bad for your credit record. At most aim to spend between 70-80% of your total credit balance. Spending all available credit on your credit card is perhaps one of the biggest mistakes people make with their credit cards.

5. Not spending your agreed credit balance (maybe because of fear of falling into debt) is also not very healthy for you. The card company gave you the card for only one purpose – to spend it! Retaining high credit balances on your card does not show you in a positive light in spite of what you may think.

6. Whatever you do, ensure that your account is not passed on to a debt collection agency. If you allow this to happen, there are always severe financial penalties to be paid. You will surely pay a high price that might result in a damaged credit status.

7. Do not get yourself into a position where the courts will pass judgement on you for none payment of your debt. This will make it almost out of the question for you to get hold of credit again in future as it will possibly ruin your credit score.

8. Home repossession also negatively affect your credit status. Try your best to safeguard your home and not get it foreclosed if you have used it as security for a secured credit.

9. If for any reason you are having difficulty making a payment, promptly contact your creditors and let them know about your difficulties. A negative report could still be filed but it would not look as bad as if you just decide not to make your repayment and also refuse to let the financial company know about this.

10. Filing for bankruptcy can also adversely affect your credit rating. So try and avoid this as it will stay on your records for a long time and you are required by law to admit your insolvency status anytime you apply for fresh credit or even a job. This admission will most likely guarantee a refusal of your application.

There are always ways to clean up your credit history however soiled you think it is. One solution is to obtain a prepaid credit card and start using it regularly. This helps a lot to restore their bad credit. However, I believe that prevention is a lot better than cure. Preventing yourself from falling into bad debt is a lot better than attempting to restore a damaged one.

Continue making regular payments on your accounts even if it’s the bare minimum, make sure that your loan or credit card payments are not behind, do not abuse your credit in any way and never exceed your credit limit. If you persist in doing this at all times, you should definitely continue enjoying and maintaining an A1 credit rating.