What Can you Do If you Have Poor Credit?

Having poor credit can make it difficult to secure loans, credit cards, or even a mortgage. It can be a frustrating and discouraging situation, but there are steps you can take to improve your credit score and get back on track. This includes actions such as taking out a poor credit credit card.

In this article, we’ll discuss some of the things are some things you can do if you have poor credit in the UK.

Credit report

Check your Credit Report

The first step to improving your credit is to understand where you stand. In the UK, there are three main credit reference agencies: Equifax, Experian, and TransUnion. You can get a free credit report from each of these agencies, which will show you your credit score and any negative marks on your credit report.

Check your credit report for any errors, such as incorrect personal information or accounts that don’t belong to you. If you find any errors, contact the credit reference agency to have them corrected.

Consider a Credit Card Designed for Bad Credit

There are specially designed cards for people who may have a substandard credit score, sometimes referred to as a credit card for poor credit. These cards typically have low credit limits and high interest rates, but they can help you build up your credit score over time.

Use could use these cards for small purchases and make sure to pay your bill on time and in full each month. This will show lenders that you can manage credit responsibly. The cards typically have a lower credit limit but with a higher interest rate to try and

Apply for a Secured Credit Card

A secured credit card is another option for people with poor credit. Unlike a regular credit card, a secured credit card requires a cash deposit, which serves as collateral for the credit limit.

Make sure to use your secured credit card responsibly, paying your bill on time and keeping your balances low.

Financial planning
photo credit: Gustavo Fring / Pexels

Consider a Credit Building Tool

Consider signing up for a tool to help you build your credit. You can sign up for financial planning apps now which allow you to track your rent and utilities as regular small repayments to help demonstrate your creditworthiness.

Tracking your monthly payments that might not otherwise been acknowledged as scheduled monthly repayments can be a great way to start helping you rebuild a poor or bad credit score, overtime. For this to take effect you will obviously need to make the payments on your rent, phone bill and utilities in full in a timely manner.

Seek Help from a Financial Charity or Credit Counselling

If you’re struggling with debt and poor credit, you may want to consider seeking help from a credit counselling agency. These agencies can help you create a budget, negotiate with creditors, and develop a plan to pay off your debt.

Be wary of debt management companies that charge high fees or make unrealistic promises. Look for a reputable agency that is accredited by the Financial Conduct Authority (FCA). You can also find free help from Debt Charities such as Step Change or access free financial advice from Money Helper.

Be Patient and Persistent

Improving your credit score takes time and persistence. Make sure to pay your bills on time, keep your balances low, and check your credit report regularly. Over time, if you make sensible decisions your credit score will improve, and you’ll be in a better position to secure loans and credit.

In conclusion, if you have poor credit, don’t give up hope. There are steps you can take to improve your credit score and get back on track financially. By checking your credit report, using credit responsibly, and seeking help if needed, you can take control of your financial future. Remember, improving your credit score takes time, but with patience and persistence, you can achieve your goals.