5 Steps To Keep Bad Credit Out Of Your Life

Bad Credit
Bad Credit

Every move you make will determine your credit score from the moment you open a credit card account. While a good credit score gets you credit cards and loans at excellent rates, low scores will make you pay more.

Paying bills on time, saving more, and cutting down your credit card usage can keep your credit score in check. If you face poor credit issues, taking bad credit loans from Finance One or similar companies can also help.

Let’s see how you can avoid bad credit at all costs.

Tackle the Credit-Impacting Bills First 

While paying your bills, always start with the ones that affect your credit score the most. These payments will include credit cards, mortgages, and any loans you might have taken. So, if you’re ever unable to pay all your bills, start with these first and handle other bills later. 

You can’t ignore the other bills too, as you have to pay them off. Always remember that unpaid bills will take a toll on your credit score big time later on.

Pay Bills on Time!

You must pay your bills on time every month, as delayed payments can ruin your credit score quickly.

So, you need to maintain a calendar or journal to prioritise all the bills you need to pay. Then, you can start saving more and spending less to maintain these bill payments properly. 

Remember that a single delayed payment like a simple phone bill will negatively affect your credit score.

Develop Better Financial Habits 

If you can’t handle your money properly, you won’t be able to pay off your credit card bills and loans. So instead of going into the complicated stuff, start by being very good at managing your money. 

Here’s how you can develop better financial habits – 

  • Use online applications or an old school journal to track your expenses every day 
  • Prepare a monthly budget as per your earnings, and try to stick to it 
  • Think twice before making expensive purchases 
  • You can also develop weekly budgets for tracking your expenditure better 

Keep Debts in Check

You’ll be surprised to know that out of 13.7 million Australian credit card holders, 21% suffer from poor credit! Debt is a significant factor for poor credit scores here. So, you have to keep your credit card balances low and continue paying bills on time to keep debt away. 

Also, too much debt can trouble you while making your monthly payments. Here are some tips to keep credit card debt on the down-low – 

  • Save money and pay a little more than the minimum amount on your card 
  • If you have numerous credit cards, pay off the one with the most debt first.
  • Keep your cards away and make cash purchases for a while

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Increase Income Sources

If your savings aren’t helping you pay bills conveniently, stay away from your credit cards. Instead, increase your avenues of income and tone down your lifestyle a bit. 

Arrange a garage sale, start freelancing, get a part-time job or monetise. Remember your hobby to increase income sources. It will help you pay your bills comfortably and also reduce the chances of debt.    

Whether you’re taking bad credit loans from Finance One or borrowing cash from someone, your credit score depends upon your expenditure.

Remember to be cautious about your spending and budgeting habits to maintain a good credit score.