Article written by MoneySupermarket
Do you have a bad credit record or do you have no credit history? Getting credit when you’re in either of these situations can be incredibly difficult, here I’ll detail some simple tips that you can do to try and get your credit record back on track!
Do you have any credit?
This might sound strange but if you have no credit history then credit cards and loans will actually work for you, as they will allow you to show a lender that you’re a reliable and trustworthy customer that can meet the repayments. If you have no credit history then getting a loan or credit card can be difficult, but there are products specifically designed for people in this scenario. Credit builder credit cards, for example, are designed exactly for this purpose and even though they do tend to have very high interest rates. They give you the opportunity to show that you can manage credit like anyone else.
If you do use a credit builder card, then don’t get carried away and remember what the purpose of the card is. It can be easy to get carried away with a new card but remember why you’re using it. If you clear your balance every month using this type of card, then you’ll avoid paying the very high interest so make sure that’s what you aim for.
If you have bad credit
If you have bad credit then there are products that are designed to help you too. Bad credit credit cards and loans for bad credit are designed specifically for people who don’t have the best credit record.
If you have a bad credit record then you will have most likely had a bad experience with debt, products that are designed for people with bad credit are designed for you to be able to show lenders that can you manage debt effectively. It’s the most effective way that you can try to repair or rebuild your credit score. If you spend some months using these types of products, you can then boost your credit rating. This will then allow you to apply for a standard mainstream credit card.
The main problem with credit builder or credit repair products is that you will most likely be paying a much higher interest rate than other people who qualify for mainstream cards. With the above in mind, you should never actually borrow money using one of these products. You should only use them to pay for something that you can then immediately pay off.