Ok, for whatever reason, you now find yourself with a bad credit rating. You might have not really understood what getting a credit card would do when you were younger and missed some payments. You might have got a loan and then lost a job and had to miss some payments. There can be several reasons why. But there are several myths relating to bad credit. If you think it means that you’ll never get credit again, then that isn’t always the case. Here are some myths about bad credit and what you can do about them.
You Won’t Be Able To Borrow Again If You’ve Got Bad Credit
This isn’t necessarily true. Of course, bad credit can limit who will lend to you. But there are a lot of providers that will offer bad credit personal loans to those that need them. The thing is, they may charge you a higher interest rate, as you are a bit more of a risk for them. So the best thing is to only borrow what you need and make plans to pay back a set amount each month. If you only go to pay off minimum amounts, then it really will spiral out of control and make it a much longer process to pay back. Getting credit and then making the payments is a good way to rebuild your credit. So don’t just presume no one will lend to you.
Defaults Will Stay on Your File Forever
Again, this isn’t the case. In time, these kinds of thing will be forgotten. Only if no new ones are made, of course. After a couple of years of being declared bankrupt or having a CCJ, your file will be nearly cleared that you’re probably likely to get credit again. After around six or seven years, mistakes like that are wiped completely from your credit profile. So don’t worry that you’ll never be able to get a mortgage or other credit ever again. It will just take time.
You Won’t Get a Credit Card If You’re Already in Debt
Believe it or not, credit cards, when used wisely, can be a useful tool to get out of debt. Where there are balance transfer options, it can be a much-needed relief to make payments without being charged an interest fee. So providers are likely to lend to you if this is the case. However, any credit application that gets rejected is marked down. So if it looks like a certain credit card won’t accept you, then go to the ones that will. You can check online at some eligibility criteria, so you know what they are looking for before you apply.
You’ll Only Get a Low Limit on Your Card With Bad Credit
This isn’t always going to be the case. However, the lender will only give you a credit limit that is manageable. But the good news is, if you need a higher limit, that if you make your repayments each month, and they can see that you are always paying on time, they are likely to increase your limit over time. So be patient, and live within your means. It can happen over time.
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