How to Improve Bad Credit History?

Bad credit history is not a new phrase, given that online money lenders are increasing day by day, making it easier for anyone with a smartphone to access a loan.

But, unfortunately, some lenders don’t assess the borrower’s ability to repay the loan. That’s why a bad credit score is becoming common in the streets.

However, sometimes it becomes hard to clear debts in this lousy economy caused by the coronavirus. So things are tough, and the interest rates don’t have signs of reducing over time.

Failure to pay off your loans on time translates to a bad credit history that can restrain you from having loans in the future.

Anyone can have a bad credit history which can make them have challenges when applying for loans.

However, some ways can help to improve your bad credit history.

1. Pay your dues on time

Paying your loans on time is the number one tip that will help to improve your credit score. No one will ever bother you with tones of reminders about your pending payments.  Paying loans on time ensures that you do not divert the money to do something else.

However, it will be nearly impossible to pay off your loans on time when you have financial constraints. Therefore, to implement that, you can consider creating multiple streams of income.

Here are some ways you can use to improve your finances:

  • Use your time wisely. There are more sayings on the street about time like, time is money, time is like a river, and you cannot touch the same drop twice. If you spend your time wisely, you will be able to find more ways to make money.
  • Create passive streams of income. They will help you have enough money to pay off your dues on time, and even it’s an excellent way to achieve financial freedom.
  • Have a strict budget. Well, you may know how to make money, but when it comes to spending it, you make mistakes. If you can manage your finances well, it will be easier to salvage your bad credit history by paying on time.
  • Learn to save money for emergencies and acquire insurance plans that can sort you out if you need some emergency cash.

2. You can set payment reminders

If you can not remember on your own about paying off your loans, it will be a good idea to set a reminder some days before the actual repayment date.

Remember, when you pay dues at the agreed time, you will be building your credit score over time.

3. Talk to your creditors

If you feel it’s impossible to repay your loan on time, it’s a good idea to talk with your creditor about it. You can set new dates to repay the loan or restructure the loan agreement to figures that you can afford.

By so doing, the creditors will not take lousy action against your credit score.

4. Get small loans

If you have no other way to improve your score, consider taking small loans and repay them faster, even before the due dates. They will help to improve your credit score overall.

It would be best if you take precautions before you apply for any payday loan from Always take a loan that you need at the time, don’t take loans to spend them on unnecessary things.

Furthermore, You should take loans for emergencies only.

5. Fix any errors on your credit score

Some small mistakes in your credit report could have a more significant impact on your overall credit score.

You should know your current credit information to detect any errors. To fix any errors you find, call your credit report issuer and the lenders to solve any differences in the data.

6. Use a secured credit card

A credit card that reports your credit information on the three national credit bureaus can help to improve your credit score.

You can deposit cash on the account that can help you repay your loans on a timely basis. In addition, the deposits will act as collateral when applying for loans hence reducing the chances of default.

And this, in turn, helps to salvage your lousy credit history.

7. Don’t close credit cards

Closing unused credit cards with debt will make your credit score worse. Shutting down the cards also means that you lose the credit limit on the card.

The closing of credit cards affects the Credit utilization ratio that goes up hence pushing lenders away.

They will assume that you spend more than your credit card limit, and no one wants to risk their money on that.

Therefore, you should always keep your Credit utilization under 30% to gain trust from the lenders.

8. Don’t borrow a lot

Borrowing from several lenders over a short time raises suspicion, which may lower your credit score.

It would help if you considered adding your income streams rather than borrowing.  The more you have several income sources, the less likely you will borrow.

In addition, constant borrowing can make it impossible to repay the loans.

9. Get a credit rebuild card

The credit rebuild card can accept those with poor credit history. Repaying your dues in full every month will help to improve your credit score over time.

These cards also report your behavior to the three credit bureau to help you rebuild your credit score.

10. Always stay up to date with your credit score report

Knowing your credit score will help you make decisions before you can borrow any amount of cash.

For instance, if you know that you have a poor credit score, you will only take small loans that you can comfortably pay sooner.

The information will help you to avoid taking loans that can negatively affect your credit history.

The bottom line

Repaying all your loans on time is the most straightforward way to improve your credit score. Consider creating multiple streams of income, and you may not even need to borrow.

If you can cling to that, then your credit score will always be at its best.

Ricardo is a freelance writer specialized in politics. He is with from the beginning and helps it grow. Email: richardorland4[at]