How To Avoid Bad Credit 

How To Avoid Bad Credit

Your credit score is important for more than you may think. It is more than something to determine whether you are a risk to a financial organisation or not. Therefore, avoiding bad credit is something which you should keep in mind whenever you are doing something which may impact your score. But, not everybody understands what things may cause you credit score to decrease, therefore we have put together some examples of how to avoid bad credit.

credit score

What is a credit report?

A credit report is your history of managing your finances. This tends to refer to any late repayments and your overall credit activity. Therefore, keeping your credit score tidy and up to date is essential. From your credit report comes a credit score. A credit score is a summary of your report transformed into a number to categorise your activity to show lenders how much of a risk you may or may not be.

Check your report

To understand how to avoid bad credit you should have a basic understanding of how a credit report works and what is included. So, checking your credit report and score is the place you should begin.  Unfortunately, sometimes we may find mistakes on our credit report. If this happens, we suggest you immediately contact the reference provider and inform them of the mistake. If you do not and the mistake stays on your credit report, it will make a negative difference to your credit score.

Pay your bills on time

Late repayments can lead to serious money problems. If you feel as though you are struggling please contact your lender or the Money Advice Service. Although, it is unfortunate that not everybody can keep up with the loan repayments resulting in further debt and negative impacts on their credit score. So when borrowing a loan, paying a contract or any other payment, make sure you can afford the repayments to avoid bad credit. You also need to ensure that you are repaying them in full as this can impact your credit too.

Don’t apply for too much credit

The last thing you want is to apply for too much credit making a lender wonder if you are struggling with your finances. When you apply for a loan, lenders tend to do hard credit checks to view your information and see everything that they need. Therefore, this will mildly damage your credit score. So, you can just imagine what multiple checks would do!  We advise that you organise your applications to ensure they are not too soon after one another or try and get a loan using a broker. If you are looking for a personal loan, here at Simple Personal Loans we can help you find the most suited lender for you. Our panel of lenders can accommodate anyone, including those with bad credit. This will also save you time, stress and effort as we are able to do all of the work for you.