To quote a major UK lender in reference to bad credit, "There is always a way." If you're struggling your way back from a bout with financial problems and are trying to restore your credit to a credit-worthy rating, there are a number of avenues you can take. Obviously, the most potent credit healer of all is time - but there are ways that you can speed up the healing of your credit.
Having good credit is more important than ever in today's world. As little as ten years ago, your biggest concern with poor credit was that it would hold you back if you were seeking a mortgage or loan. For the many who don't believe in borrowing, that hardly seemed an impediment at all. In just ten years, though, the entire face of credit has changed. The ease with which companies can examine your credit has made doing a credit score check the norm for employers interviewing job applicants and landlords deciding on whether or not to rent. These days, your credit status can affect your ability to get a good job, or to rent the flat that you've fallen in love with. So what do you do if your credit score is less than perfect?
Whatever the state of your credit history, the answer to that question is that you must start building a good credit history - now. How you do that depends on the actual state of your credit score, though.
If the major problem with your credit score is that you've never had a credit card or a loan, then chances are that you can find a credit card or a personal line of credit with a fairly competitive annual interest rate. If you make regular payments on your credit card or loan, on time and in full each month, your credit score will very quickly improve. As long as you're careful with your purchases, and are sure to pay your debt on time, having a credit card is GOOD for your credit score. When you're looking for a loan for a car or a home, your history of on time payments will stand you in good stead.
But what if you've already bunged up your credit? If your credit score is so low that conventional card issuing agents won't consider you, there's still an avenue for you. A secured credit card allows you to put down a cash deposit with the issuing bank as 'collateral' to ensure that you repay any charges you make on your card.
Secured credit cards are available to anyone, regardless of credit history - because you are guaranteeing payment of charges by making a deposit equal to your credit limit in the bank chosen by the issuing agent. Secured credit cards are no different than regular credit cards beyond that - no one will know that the card is a secured credit card. It can be used at merchants exactly the same way that any other credit card is used.
As you make on time payments and keep your credit debt on that card low, you'll begin to improve your credit score, and eventually - usually within a year or so, you'll qualify for unsecured credit cards with better interest rates
