Why you really have bad credit and what you can do about it

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Your credit score is crucial because it gives you access to loan facilities and makes you more trustworthy with creditors in general. Basically, your credit helps them know how likely you are to pay back your loans and how financially stable you are. If you’ve ever been declined for a loan, then you know how much a bad credit score can limit you.

Things That Can Get You a Bad Credit Score

Here are some of the things that can keep your credit score low.

Not putting a lid on your purchases

This is one of the traps of a credit card. It lets you buy whatever you want, whenever you want it. Depending on your credit limit, you can put most of your basic needs and then some on your credit card, and just pay at the end of the month. The problem with that is since the money isn't sitting in your account somewhere, you don't feel the weight of your purchases. It’s often at the end of the month when the bill comes in that the full scope of how much you’ve spent really hits you.

Not paying your bills on time or only paying the minimum

After racking up bills on your credit card, the real blow to your credit comes when you don’t pay on time, or when you only pay the minimum requirement. Your credit card company, and lenders in general, will take this to mean you’re not in a good financial position. It’s a feedback loop where you buy more than you can handle with your card, and then when the bill comes, you’re unable to pay.

Most people live in this cycle month after month. Admittedly, it's a little difficult to break. But then, if you want to get out of bad credit society, it's a change you have to make.

What You Can Do About a Bad Credit Score

Now that we’ve seen the common causes of why you have bad credit, let's look into how you can fix it.

Use debit cards.

Not many people use debit cards for their expenses because they require you to actually have the money in the bank before you can spend it. Most people prefer to just by whatever they need to until the bill comes due.

However, as we've seen, that's a bad strategy. When you only buy what you can afford, you stay out of debts. It also forces you to have real money handy, and that means you can pay your bills on time and with enough money. These two things will boost your score.

Get help.

The longer your debts linger, the more incapable of paying them you’ll seem. Defaulting on payments provides one of the biggest hits to a credit score. You can seek out a resource that helps you set up a trust deed. With a trust deed, you can set a period of repayment on your terms, instead of your creditors, and that can make it easier for you to pay back.

Fixing your credit score may not be easy, but it will be better for you in the long run. With a better score, you can be able to access funds when you need them the most.