Tips for Repairing Poor Credit
Overview
Poor credit can be the result of a number of things.
How people get poor credit:
- Being slow payers
- Non-payment
- Missed payments to creditors
- Having no credit history
- Making just the minimum repayment on your credit card
- Applying for several credit cards or loans at the same time
- Having an account sent to collections
In South Africa, where three million consumers have poor credit, there is a lot of financial education that is needed. Of the 20 million credit- active consumers in the country, a significant number of these are struggling to keep up with repayments.
Research has shown that the level of household debt is at 79% of disposable income, which means that many South Africans are spending most of their money on debt repayments.
Tips for repairing poor credit:
To boost your credit score, you should pay down your balances and keep those balances low
By keeping your balances low, your credit score can improve.
Make sure that you pay your bills on time
You need to ensure that you pay your creditors on time and prove that you are reliable.
Spot any mistakes on your credit report and challenge them with the credit bureau
If there are any mistakes on your credit record, they could be affecting your credit adversely. Make sure your report is correct and get your credit back on track.
Cancel any unused credit cards
This is one of the easiest ways to repair poor credit. If you aren’t using the credit card, cancel it.
Set up automatic payment reminders
This way you won’t miss payments.
Stop using credit cards altogether
You could also go the drastic route of just getting rid of all your credit cards.
Change your money habits
You need to monitor your spending habits.
Set a budget and stick to it
By setting up a budget you will be able to control your spending habits and repair your poor credit much faster.
Negotiate with your creditors
You could set up new payment plans to settle your debts.
