How to build a good credit score

It's this time of year when our finances are taking a bashing in the pursuit of a perfect Christmas. Whilst it may be tempting to put everything on credit some of us may not have a glowing credit score to begin with. Having a good credit score is incredibly important, especially if you need a loan, which is inevitable at some point in your life or are purchasing your own home.

So if your credit score is looking a little bleak, how on earth do we change this?

Map out your current credit score

You will need to map out your finances carefully and rethink the way that you spend money. It doesn’t matter whether you have lots of credit spread around, a significant amount of debt or simply a few missed payments. Having a clear view of your current financial situation is the first and most positive step you can take.

Create good habits 

Building good financial habits now will help rebuild your credit score. So you can move forwards and hopefully enjoy greater financial security for the future. It is important to keep this end goal in mind, particularly if you need to make cut backs. Workout your ingoings and outgoings this will help you to see where you can make cutbacks and also how much disposable income you have.

Clear and/or consolidate debt

If you have any outstanding debt and are struggling with the repayments one way of making the debt more manageable may be to consolidate your debt with a specialised debt consolidation loan. The rates may be lower than the original debt and it will be much easier to manage with one payment a month rather than many smaller payments.

If you can, try to clear debt where possible. If you're looking to minimise clutter in your home then get selling! Decluttering your home with unwanted items, is not only good for making your home a much more calmer space it could also be a potential money spinner. Using site's such as Mitula where you can place classified ads on items from car's to jeans, makes it really easy to earn a little extra money to put towards paying off debt.

Re-build Credit

It maybe worth getting a short-term loan/credit cards which are designed to help people rebuild their credit, there are some leaders who consider those with bad credit. The interest rates are typically higher than usual so you must repay your balance in full every month. If you make your payments on time then your score could improve within months. These cards are also useful if you have no credit as they allow you to build up a good credit history. However, you must be committed to this and not fall into old habits. Only do this when you know you can repay in full if you're using them to build a good credit score.

Hopefully with these positive steps you can start to build a more positive financial future for yourself.

K Elizabeth xoxox

*Collaborative Post