HOW TO REPAIR A POOR CREDIT SCORE

Honestly, people with poor credit scores don’t need anyone to repair their poor credit scores. From https://womibablog.com/2022/09/02/what-is-a-credit-score/, you already know what a credit score is and why we should all have strong credit scores. Unfortunately, personal finance is not taught in school.

There are various methods anyone with a poor credit score can use to repair their poor credit score. But firstly, it is vital to make you aware that it will take time with constant efforts, behavioural change and good financial knowledge. Credit scoring agencies use a scoring model to create your credit reports from your financial report history.

To understand your credit score and report very well, it is ideal to note the factors that make up your credit score report. They are as follows:

1. Bill payment history
2. Information about your personal and student loans
3. The age of your bank accounts
4. The credit and loans you had that ended in CCJ settlements
5. Soft and hard credit checks
6. Inaccurate information is not in the electoral register for UK residents., etc.

Bill payment history:

What count in your bill payment history is the consistency at which you maintained payments on time. Moreover, your credit cards are included as well as these accounts:

• Student loans
• Home Mortgage
• Phone and broadband bills
• Bank overdraft statements
• Car loans
• Information about your personal and credit loans.

One or two late payments in your credit report or file might not have severe effects, but many will negatively impact your credit report. Things you could do to save money and avoid late payment fees is calling your creditors before the due dates to arrange a way out. Many usually give some time for you to manage your financial woes and make payments on the new dates you are given.

A pattern of late payment behaviour is a sign of higher credit risk; it is also telling your future creditors that you are not creditworthy. It is significantly harder to rebuild a credit score once it is lowered due to late payments. Do everything to avoid late bill payments, and do your best to pay all your bills on time. You will save more money on interest with a strong credit score.

Information about your personal and student loans:

Your credit utilization history is another avenue for lenders to tell whether you are worthy of the future loans you might want to access. Pay off your loan debts. It is hard in this economic turbulence, but it is not impossible. Going frugal will give you a great chance to save and pay off your debts. The quickest way to pay off debts is to start with the debt with the smallest balance. As soon as you go frugal with your money, pay as much as possible towards it while making minimum payments on everything else.

Secondly, if you have credit card debts, start with a credit card with the highest interest rate. You will save money and another thing I would like you to take this piece of advice with you – stop accepting credit cards. There is always this argument about how credit cards can help rebuild credit reports. However, credit cards only make financial institutions rich. They know that millions of people lack financial literacy and will always fail to make repayments when they’re due. This makes them rich; you are better off without it. I have never had a single credit card, and l am fine because l know how to manage my money.

The age of your bank accounts

Bank account age is significant and covers a good percentage of your credit report. Closing old accounts, even If you don’t use them, will shorten the total average of your account age. Keep your account open as long as it makes sense. Your oldest accounts will continue to boost your credit score.

There is not much you can do for new accounts and credit holders about age; it is just a waiting game. And continue using your loans or other credits wisely and wait for your account to get old.

The credit and loans you had that ended in county court judgement (CCJ) settlements:

If you have any bill payments that ended in CCJ settlement, you have two options :

• Pay the money if you do owe it
• Cancel the judgement

This is a government link to everything you need to know about county court judgement debt settlements –County court judgments for debt: Overview – GOV.UK (www.gov.uk)

Lenders and credit institutions will always like to see that you can handle debt problems and the consequences in a legal way. They also want proof that, wherever you make some mistakes, there are always obvious positive steps you take to resolve them. If you have a CCJ dispute and you checked your credit report and think you were unfairly judged. You can write the court for it to be set aside. When this happens, the adverse effects will disappear from your credit report. You can message me at admin@womibablog.com, and l might assist you with personalized information on how to get it set aside. I had done it before and got a positive result. You must be truthful, and the court wants you to come with hard proof.

If you owe the money, call the debt collector company and make arrangements on how to repay what you owe.

Don’t be scared about CCJ. It falls off your credit report after 5 years anyways. Concentrate on your poor behaviour towards loans and credit. Deal with the root causes of what makes you take credit and abandon the repayments. Pay all your credit bill repayments on time. You will be rewarded for handling your credit repayment efficiently with an improved credit score.

Soft and hard credit checks:

The soft credit check might not have the same adverse effects as the hard credit check. First of all, you need to know the difference. A soft credit check happens when you check your credit report or when financial institutions check your eligibility for certain credit products. A soft credit check is not visible on your credit report, but it is recorded and the data stored.

A hard credit check is a wholesome study of your credit history so lenders can make informed and official decisions based on how you repay loans and credit products you previously borrowed. Any negative remarks on your credit report will make it nearly impossible to take loans or get the credit products you might need. Negative remarks stay in your credit reports for close to 5 or 6 years.

The difference between Soft and hard credit checks is that soft credit checks are not visible, but hard credit check footprints are obvious for financial institutions like mortgage lenders to see it. If you are repairing your credit score, you must avoid hard credit checks like the plague. If you are struggling with your finances, sort out why you are struggling with your finances and find a way to increase your earning power before accessing loans. The more loan rejections you get, your credit score is knocked down.

And you have to understand that financial institutions always check whether you have been approved for any loan successfully. If you apply for loans for few times and get rejected, It will suggest that you are not managing your finances well.

Inaccurate information is not in the electoral register for UK residents:

Check the personal data on your bank and other credit accounts, and update your bank with your new address when you move house. Staying on the electoral register helps financial institutions like mortgage lenders to conform where you have lived and currently living against the data you provided. Financial institutions need that information to know you and confirm you are who you say you are. If there is any inconsistency in your personal information, it might prevent you from accessing credit products.

Repairing your credit score may not happen overnight; effectively managing your finances and increasing your earning capacity will significantly impact your credit score.

It is pretty easy to repair your credit score by yourself if you are willing to change all the negative financial behaviour that triggers the misuse and mismanagement of credit products. You can explore what credit score is here – https://womibablog.com/2022/09/02/what-is-a-credit-score/.