If you have ever been denied a credit application or you just know that you have a bad financial history, it can be tempting to do nothing and just ignore the situation.
And while this may work in the short term, it won’t help you improve your situation or help to get your finances in shape for the next time you make a credit application.
If you are interested in taking charge of your finances and financial situation, below are some tips which can help.
Wrap It Up!
The first thing that you will want to do is to take note of all of the debts you have, ranging from loans, to credit cards, right through to store cards you have. If, when you have this information, it appears as if you are making only the minimum payments and not actually reducing your overall debt amount then it’s worth considering a debt consolidation loan.
A debt consolidation loan works by transferring all of your existing debt to one large loan. Once the transfer is complete all of your current store and credit cards, including lines of credit, are closed and you just have one big debt.
While it can seem overwhelming, being able to not only visualize your debt but also see it reduce through effectively single-monthly payments is a great motivator to keep you working towards your goal of financial freedom.
If you are living month-to-month then you likely aren’t saving. After all, why would you save while you are in debt? The reason is to help improve your credit score from a range of angles.
Showing a consistent level of saving is a great way to improve your score, but only if the savings are consistent. If you find that you spend much of your savings each month on unexpected items or luxury items, now is the time to change the habit.
Instead, create a realistic budget which allows for fun and entertainment. For example, if you love the movies or DIY projects, consider buying a book of general admission tickets or deals from the Groupon Coupons page for Home Depot at the start of the month and apportioning them throughout. By knowing that you have the ability to enjoy yourself along with saving you are more likely to stick to your budget.
Last, but certainly not least, are direct debits. Direct debits can get a bit of a bad and unfair reputation because many people in debt see them as the enemy. However, when managed correctly, direct debits are a great way to improve your credit score.
Managed well, direct debits allow your service provider to charge your full account each month to your bank account without you having to worry about missing the due date. This is not only a great way to keep your bills in order, but it will also drastically reduce the number of late and declined debit fees which you are likely paying each month.
When it comes to improving your credit score and financial situation it’s’ important to remember that it isn’t something which is going to happen overnight. In fact, it can often be a long road. However, at the end of the road is a great feeling of financial freedom!