Having a poor credit rating is no fun, and if you have found yourself with one, you’ll probably find that it’s closed a lot of doors for you. The problem with credit ratings is that we don’t tend to think about them until it’s too late, when they should be noticed and nurtured in order to keep things ticking along nicely. Of course, not everyone is fully in control of what happens to their credit rating – sometimes a poor rating is the fault of a credit/service provider, and sometimes payments are missed due to things beyond control, such as a job loss or illness. However it came about that your credit rating is less-than-favourable, it’s likely to prevent you from being approved for mainstream credit products, which can make things difficult.
Making sure it’s affordable
Guarantor loans are one of the cheapest ways to borrow money if you have a poor credit rating, and they can really help to boost your score if you have had issues in the past. One of the most important things to do when looking at borrowing in order to boost your score is to ensure that you can afford the repayments. A good guarantor loan company will run through your income and expenses with you to make sure that you can afford the payments, but you should also be happy that the loan is easy to repay. The more affordable it is, the less likely it is that you’ll default on the payments, and therefore harm your credit rating even further.
Choosing the repayment length
Looking at the length of time you’re expected to pay back the loan over is an important part of the process. The longer you repay over, the more money you’re likely to pay back in the long run, but it does have its upsides. One of them is that the longer the repayment term, the lower the monthly repayment (making it easier to manage) and the second is that the longer you can demonstrate an ability to meet debt payments in full and on time, the better your score will be at the end of it all. For this reason, payday loans are not such a good way to boost your credit score, not to mention the fact that many lenders will refuse to lend to those who have taken payday loans in the past as it shows a lack of stability. Guarantor lenders are happy to lend to those who have taken payday loans, whereas many mortgage providers will not.
Keeping an eye on your score
Checking your credit score regularly is a good way to keep on top of how your actions are affecting your credit file. You can do this online through any of the main credit scoring agencies – Experian, Equifax or Callcredit. Setting up a 30-day free trial and then cancelling it before the money is taken is a good way to get a look at your file for free. You can also see your score for free through a service called Noddle.