Making credit purchases online without having some kind of credit rating or credit score which determines how much of a risk you will be to the lender can be difficult. Your credit history is perhaps one of the most important features of adult life these days, and not having one is almost worse than having a bad score.
No History, No Credit
Some people, especially those of older generations, use cash to pay for everything, refusing to run credit accounts or hold credit cards. This is a hangover from the years following the Great Depression when the value of stocks and shares plummeted, suddenly casting thousands of people into poverty. Lack of trust in the banks meant that people kept cash at home, stashed in tins under their beds, and they paid for everything as they needed it. Today, we live in a more fluid time, with ready credit available for almost everyone. Therefore, those people who maintain rigid control over their finances and live within their means may well find themselves unable to obtain credit when they need it, be it for a mortgage, a car rental agreement or any number of life’s necessities.
If at first you don’t succeed…
While this proverb is usually about the positives of trying and trying again, in the case of your credit score this is not ideal. While it may seem logical to try for the ‘best’ loan (the lowest interest charges from very respectable high street banks), in fact, each time your request is declined, it shows as a ‘ping’ on your credit rating. Having multiple ‘pings’ on your credit history in a short period of time can make it appear as though you are very desperate for money, and are trying everyone that you can think of. Instead, apply to one lender from whom you are certain you will be able to get the money you need: this will put one ping on your credit score, showing that you did your research before applying.
If you have made errors with your credit score and are now struggling to qualify for credit facilities that you need, a payday loan can actually help you out. First of all, be absolutely certain that you can meet the terms of the loan as missed payments will worsen your rating. Do not look at the amount you will be borrowing, rather look at the amount you will be repaying. Payday loans can have a higher interest rate than high street banks, but they are usually short term and thus manageable. Maintaining your payday loan properly is a good way to prove that you can manage debt responsibly, which, you will find, opens doors for you.
To summarise, in order to improve your credit score, you must have a clean, visible track record with debt and credit services. Look after your credit score, and it will look after you!
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