How to sort out bad credit rating

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Published: 20th January 2011
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Bad credit rating is causing loads of problems for people who have loans, credit cards and hire purchases even mortgage. They have to look for solutions to sort out bad credit rating before they can even think of consolidating their debt at a lower interest rate than the current or get better repayment options and conditions. Getting a finance with bad credit rating has become more and more difficult and expensive so you have to follow the below guide to be able to sort out your bad credit rating first.

Bad credit rating is a result of missed or late repayments on one or more financial products like loans and credit cards. Or it might be that you have been forced into an agreement or made arrangements with your creditors as you were struggling with bad debt. The next step on the journey is to repair your credit as soon as possible. Depending on your circumstances and how bad your credit rating is it will take time and effort.

1.Find out how bad your credit rating exactly is

You need to find out how creditors can see your credit profile by checking out your credit file. It is currently available on many sites and checking what is in your credit file can really give you a good idea of how much work is needed to repair your bad credit.

2.Get statements and reports on your finances

You next have to get a statement of all your accounts. See how much extra interest you are charged and how much is the cost of your overdraft. How much have you paid out in fees and charges because of not making payments on time? By eliminating these unnecessary expenses you are going to be able to save money and pay the installments on time.

3.Make arrangements

You can next make necessary arrangements with your creditors. Make sure you are shifting your repayment dates to the dates when you do have money in your account, so you are not getting charged by your bank and your creditors at the same time.

4.Set up a budget

In order to meet your monthly repayments in the future you have to make sure that you will have enough money left in the end of the month after paying every necessary bill. So try to set up a tight budget and save money where you can. You can save on travel costs, utility bills and even grocery shopping if you are planning ahead and opt for cheaper solutions.

5.Set up a plan to make repayments on time

After setting up a budget you need to make sure you stick with it. Create a financial calendar or set up reminders on your smart phone or computer to make sure you are reminded of the repayment dates. Making a payment on time will make your credit score build up gradually, so it can really sort out bad credit rating with time and at no cost.

Laura F Wolf is passionate about helping people solve their bad credit. I have loads of free info on my blog.

I have also published a book on UK debt

consolidation and credit repair
that can be read on my site.

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