What Not to Do When You Have a Bad Credit Score
A bad credit score makes life even worse. We must pay attention to a few things to prevent it from doing so.
Bad credit scores can happen for more than one reason. Your credit score can go downhill, from problems in your income to misusing (no offence!) the credit card due to lack of information. With it, your financial fortunes reduce a little bit. Later, this can translate to more complexities and financial mismanagement when the score doesn’t improve.
You can fix things, though.
Remember that a bad credit score doesn’t come back on its own, even if you live frugally. You can choose to live like that, but it may not contribute to making active changes in your credit score. Sometimes, to get things to see the brighter side, we must make some endeavours by ourselves.
That can start by limiting some financial habits to prevent the bad credit score from worsening.
Read on to find out more about this.
Stop Making a Poor Credit Score Poorer by Controlling These Money Habits
Credit card holders in the UK stick to Experian standards to define their credit score. The said standard is used widely in this region. If your credit score is messed up or you simply want to know your score, head over to the Experian website.
According to this standard, you can call a score from 720 to 561 a bad or poor credit score. If it goes to 560 or below that till zero, then we have no choice but to call it a very poor credit score. To fix this, we are going instead to check some of our financial behaviour and stop them rather than doing something new.
Here are a few things you SHOULD NOT DO IF YOU HAVE A BAD CREDIT SCORE. Control them instead:
- Ignoring Paying Credit Card fees on Time
Your credit card comes with several fees. When you own a card, you must pay these fees as rules of affording it. To understand that, we need to know how a credit card works in the basic sense (many of you already know it).
A credit card issues a new line of credit to help you spend money using a plastic piece of card. You can transact money digitally and can carry the card for added convenience. Using a credit card is safe, hassle-free, and quick. However, you don’t get all of these facilities free. You apply for a credit card; your credit card provider approves it, and then you use it in exchange for some fees.
Usually, a credit card needs an Annual fee and Interest charges. You also have cash-advance fees. But there are additional fees that you need to take care of, too, such as:
- Foreign Exchange Fee
- Over the Limit Fee
- Refund Payment Fee
- Late Payment Fee
The list will go on. But if you have a bad credit score, pay your late fees as quickly as possible. Otherwise, it might get the credit score even lower.
- Paying More than Your Credit Limit
Everything has a rule. Credit cards do too. Using a credit card will allow you a set limit. If you pay more than that limit, then your credit card provider will charge you over the limit fee.
Usually, the credit limit is what we call a set limit with a percentage of it. You have to use money in that percentage of the limit. You cross that limit and your credit card provider will charge you penalties, which you will not like.
What is the usual credit limit then? Well, credit card providers generally prefer using not more than 30% of your credit limit.
For example, John has a credit limit of 500 pounds. He cannot spend over 30% of that limit, which is 150 pounds. He needs to keep the expense anything below 150 pounds. If, by any chance, he spends more money than that amount, he would have to count extra charges as the limit fee.
People with bad credit scores may get confused and spend more than their set credit limit. It’s a normal phenomenon. But, now that you know about it, you can still control it, can’t you?
- Delaying the Repayment of Credit Card Debts
If you have multiple pending payments using your credit card or you are suffering credit debts, then it will take just a little more time to turn your poor credit score, of course, very poor (and problematic).
With a very poor credit score, you have to spend even more money. You will get no credit card facilities, and your personal or business finances (if you use a credit card in these domains) will suffer financial issues and lack of savings.
It is best to get some money from your income or other sources to resolve this problem as soon as possible. Suppose you don’t have a good balance in your savings account and don’t see any other way to gather that money quickly. Go for 100% guaranteed money loans for bad credit. They ignore a bad credit score for the loan if you can repay using the money you earn systematically in instalments.
Using this loan, you can repay your debts, resolve your pending payments, and handle your late fees and other associated credit card costs. This will instead improve your credit score. Now, if you pay back this money loan for 1000 pounds to your direct lender at the right time, then your score will improve even more.
- Missing Updates
Many often forget to update their credit cards. A small step from your side is to update your credit score by sending you an updated credit card report with a refreshed score.
You can and should cross-check the transactional details and make your calculation to verify your credit score. If you detect some anomalies, contact your credit card provider to solve them immediately.
To Conclude: Applying for New Card While the Other’s score Is Still Poor
You should not apply for a new credit card when you suffer from a poor credit score.
Your credit card provider will check your previous credit report and score before issuing you a new line of credit. If they track poor credit scores in the previous card (which is the already existing card), then your new line of credit may experience a negative influence in its report and score.
You don’t want to mess up two credit cards.
Instead, solve low credit score issues in one and then go for another one. That will help you manage credit cards smartly. As a result, life will become more comfortable and, of course, financially rewarding.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.