Is Your Credit Rating Grating?
Your credit rating is quite an important piece of recorded history. It tells something of your ability to manage financial debt to a possible lender who may have no other way of knowing.
You may feel that it is pointless to think about buying your own home if you have a less-than-perfect credit rating. However, in-roads can be made into this problem, and with patience you could be house-hunting this time next year!
Let us suppose you feel that your credit rating has been a little ‘off-color’ and that your record is not looking the way you would like it to. Some of us experience bad times, divorces, patches of unemployment, illness – there are many good reasons why a person can have a bad credit history.
Unfortunately these bad times can be mirrored in our credit rating. Failure to pay bills on time, or pay them at all, will be listed in the history.
But now life has been good to you, and things are under control, so how to get rid of all the black marks from previous years? Well, in effect, you can’t! Sorry, that is the bad news – but there is good news too! There are two ways around this problem that are fairly easy.
Some banks will set you up with a way to give you another chance! Many won’t, but there is at least one national bank that will consider helping you.
They will issue you with a credit card that carries a low credit limit of say 0.00 to 0.00 and you will deposit the equivalent sum of money in a new bank account at their bank.
Your money will not be used by you, it will sit there. It is like insurance for the bank. Every month you will use your credit card (make sure you keep a running debt on it), and every month you will pay the card off, or pay the minimum payment or a larger amount. This must be paid on time each month, as you are attempting to prove that you have control over your finances now.
The second way is this: there is a credit card company that is always sending out application forms nationwide; they actually advertise that you don’t need to have a good credit rating to get a credit card with them
If you get one of their cards, and pay off at least your minimum payment every month, you will be building credit. Now that you are trying to re-establish good credit, there are three golden rules.
Pay all your bills. Pay minimum balance when you can’t afford more. If you miss payments, get them up to date and do not let it happen again. i.e. request direct debit payments.
Even the most lenient mortgage lenders require a good credit history for at least a year, so if you follow these tips, you could be on your way to buying a home next year!