Thursday, 16 May 2013

Credit Rebuilding Tips and Advice

Having a good credit rating and history makes getting good rates on financial lending a lot easier. It all comes down to risk: if a lender considers you to be high risk, the spending limits they offer you will be low, and the APR high. While this may seem to be less attractive to many, 'bad credit' credit cards make for a great way to rebuild your credit rating if it has been tarnished in the past.

Poor credit usually results from irresponsible spending and poor financial planning. If you have missed payments in the past, or have regularly gone over your spending limit, this will negatively impact your credit history. In order to rebuild, you can use bad credit credit cards and, as long as you are sensible and cautious with your spending, you can gradually improve your credit rating without suffering too much financial strife.

These types of credit cards are also useful for those who have yet to build a credit history, or who simply have a limited one. Again, lenders who have little or nothing to go on when determining a potential customers risk will err on the side of caution. In order words, they will not qualify such individuals for their best rates. 

Specialist credit card suppliers who deal with those with poor credit histories, or no credit histories, are the best options available if you find yourself needing to build or rebuild your history. One such supplier is
aquacard, who have a select number of products, such as their advance credit card, available to help you prove that your financial issues are in the past.

This is the crux of it: proving to lenders that while you had financial difficulties in the past, and were financially irresponsible, you are now both sensible with your finances and gradually getting out of debt. Lenders can explore a great deal of information regarding your financial past by checking on your credit history. If they see that you have been improving your record over the years, you will be looked upon as a far less risky prospect. Consequently, you'll begin to qualify for better interest rates and higher limits when applying for credit cards in the future. Not only this, but you'll see better rates also with other forms of lending, such as loans, mortgages, and so on.

Using credit reference agencies like Experian and Equifax will help you determine exactly what your current rating is. If you feel that there are mistakes, these can be disputed. It is not unusual to find that there are errors on your credit rating, and when these are eliminated you'll find that your credit score improves.

Thankfully, there are a variety of credit card lenders available and it should be possible for you to get a line of credit from one of them at least. Once you do, plan the use of your card carefully, ideally using it for monthly expenses like phone bills or utilities. This will ensure that you are able to cover the balance of the card each month, helping you gradually rebuild your rating.

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