This is an absolutely terrible situation to be in. Unfortunately, sometimes things go wrong and you just cannot do much to make them right. In this situation what you need to do is everything in your control to build your credit. Most of these options will take a while to see effect, but that’s the way this system works. It’s a long and slow process to build your credit once it has fallen. It is only going to get tougher and tougher to get a loan with a low credit score.
Here are a few things you can do to increase your rating.
- Close any unused accounts if you do not require it. When lenders are appraising you to lend, they will take into account all the different credit limits available to you and not just what you owe right now. Fewer well maintained accounts are better.
- Keep the balance on your cards to less than 25% of the limit. This is the best way to be looked upon as a low risk candidate since you do not use up all the credit that is available.
- Review your credit history often. Whenever you apply for a loan, credit card, mortgage or any other type of credit, the lender will spend time looking at your credit report. The decision will be made based on this information. Check your credit report for any incorrect information. Be sure to keep an eye on financial associations.
- Protect your identity in every way you can. Go through your credit statement. If you find any suspicious or unexplained activity, immediately let your credit card company know about this.
- This might sound silly, but make sure that you register to vote at your current address. Lenders use the electoral register to make sure that they are taking precautions against possible fraud. They make an effort to verify that you are residing in the place that is registered.
- Be careful about applying for credit too often. Whenever you apply for credit, the lender will check your credit history. Whenever they do this, there is a slight dip in your chances of getting credit because future lenders realize that you are sort of desperate to get more and more credit. They do not know what to make of this situation. The might believe you are in financial distress due to which you are not an ideal candidate for a loan.
- Make sure you are paying all your bills on time. The moment you start paying late, is when your credit score starts falling. To make sure that this situation doesn’t occur, be sure to pay everything off in a timely manner and in whole. This is good practice in general and will prove to lenders that you are responsible and a good person to lend to.