6 Smart Strategies to Recover from a Bad Credit Profile

By Angela Monroe - February 5, 2018

When you have bad credit, you’ll find it difficult to access a range of financial products or services. For instance, buying a car or buying a home can be much more difficult if your credit profile is poor.

A bad credit profile may not prevent everyone from obtaining credit. However, it is worth knowing if you need help with bad credit. By improving your credit profile, you’ll put yourself in a better position to obtain bad credit loans.

If you’re someone who has bad credit and you’re really in need of a new car, then you must take steps to improve your credit profile. But how can you do this? To get you started, here are six smart strategies that will help you recover from a bad credit profile. By following these strategies, you will put yourself in a better position to obtain a bad credit car loan.

1. Check your credit report for errors

Before you apply for a bad credit loan, you should first check your credit report. Checking your credit report will give you an idea of where you stand financially. You should also check the balance on your credit cards and any other credit accounts such as personal loans.

When going through your credit report, check to see if there are any errors in your profile. These errors may include incorrect credit history details, mistaken judgements and defaults, and errors with personal details. Mistakes like this can adversely affect your ability to obtain a loan, so you should resolve any errors in your credit profile before starting a loan application.

You are entitled to obtain a free credit report once each year, so make sure to do it. Should you find any errors, dispute the errors with your credit reporting agency or bureau. By eliminating errors from your credit report, you’ll be in a better position to obtain a loan.

2. Consolidate your debts

If you need help with bad credit, you probably have some existing debts to pay off. Before you approach lenders for a car loan, you must show them that you are financially responsible. If your existing debt is too high, then you’ll find it difficult to convince lenders to offer you bad credit loans.

Try to consolidate and reduce your existing debts – this will allow you to improve your credit profile significantly. However, consolidating debts is easier said than done, and you’ll need to figure out what you can do to reduce your existing debts.

3. Set your bills on autopay

Setting your bills on autopay will ensure that your credit obligations are met before you spend your money on other things. There’s no chance of missing a payment because you forgot about it because it will be direct debited from your account on the day you get paid.

By forcing yourself to be accountable by automating your utility bills and other essential bills, you will give your credit profile a big boost. Banks and lenders will consider you to be better financially equipped when you make your payments on time every time, and they’ll be much more likely to offer you a credit contract when you need a loan.

Another advantage of setting bills on autopay is that you’ll never have to bother with late payment fees. With autopay, your bills will automatically get deducted from your account when they are due.

The only downside with this is that you’ll have to make sure that you have sufficient funds in your account to set bills on autopay. This is why you should automate direct debits on the day you get paid. Then what’s left in your account is the amount that you have to spend until your next payday, and you don’t need to fear the debt collectors.

4. Show regular income

Another way to give your credit profile a boost is if you have any form of regular income. For instance, if you work from home or if you have rental income, these can count towards repairing your credit profile.

Regular income streams will let credit bureaus know that you have some financial capacity. It will also show lenders that you have the repayment capacity for bad credit loans.

If you are on Centrelink payments, then certain types of payments can also be considered as regular income. However, while credit agencies recognise Centrelink payments as income, many lenders do not. It is best to check with professional consultants or brokers what forms of income can help with bad credit.

5. Start building a good credit profile

Even if you’re trying to obtain bad credit loans, your long-term goal should always be to maintain a good credit profile. Unfortunately, the catch is that the more you borrow on bad credit, the more difficult it will be to maintain a good credit profile. There are however some things you can do to help your situation.

For starters, make sure that you are in a position to repay your bad credit loans on time. If you can do so, then your credit profile will certainly improve. This is because you will be making consistent repayments, which will prove that you are financially responsible.

Once you obtain bad credit loans, you must take all necessary steps to improve your credit profile. Make sure to spend less than your income and don’t take up credit unnecessarily. Refrain from using your credit cards and don’t miss payment dates. Finally, ensure to watch your money and where you’re spending very carefully.

6. Get help with bad credit from professionals

Repairing your credit profile cannot happen in a week’s time. It takes a lot of dedication and consistent effort to repair your profile and maintain it. It will take months of effort before you can start seeing improvements in your profile.

Also, it is a good idea to consider taking the help of professional consultants or brokers to improve your credit profile. Professionals can help you with every aspect of your credit profile from checking your credit history for errors to consolidating bank statements. They can also offer you important advice on how to watch your money.

Professional consultants are your best bet when it comes to finding help with bad credit. Remember – you’re not the only one suffering from bad credit.

Thousands of Australians who have bad credit are able to obtain bad credit loans thanks to the help of professionals. Professional consultants can guide you through the process of improving your credit profile, and they can also help you obtain bad credit loans.

Start improving your credit profile today

To improve your credit profile, you must start taking action immediately. Remember, it may take some time for you to repair your credit profile fully, but you can still obtain bad credit loans nonetheless. And, if you take the help of professionals, you’ll be doing yourself a big favour.

To get help with bad credit and to increase your chances of getting bad credit loans approved, talk to one of our professional consultants today!

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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