Unfortunately a bad credit score isn’t something that can be fix instantaneously and when you’re applying for bad credit home loans , any red flag on your record will require a thorough explanation. But with a little perseverance and forward thinking you can improve your credit history and place you back on the path to home ownership.
1. Set up reminders
The first step towards repairing your credit history is to pay bills on time. Any late payments for utilities or missing remittance on existing loans will appear as black marks on your credit report and reduce your chances of a lender accepting your application. Think about setting up automatic payments through your banking portal or calendar alerts so you won’t forget.
If you’ve missed a number of payments in the past, now is the time to get up to date. While they will not be stricken from your history, ensuring that current bills are paid promptly will lessen the impact of older credit problems – the more recent your good habits appear, the better.
2. Reduce your debts
One of the major aspects of a credit score is how much revolving credit you have, compared to how much you’re regularly using. Paying a significant percentage of your balance and keeping it low will reduce your debt to credit ratio – something that will greatly improve your credit rating. The ratio generally recommended for credit utilisation is around 30 per cent and ideally lower if possible. Getting into good habits by settling debt rather than moving it around can steer you back on the right course.
3. Check your credit report
A credit report holds the data used to calculate your overall score, but from time to time it may contain errors. Carefully checking the accuracy of the reporting will help you find where your issues lie and might give some space for negotiation. If you are struggling to manage your debts and payments, think about seeking help from a credit repair agency. These firms will comprehensively examine your credit listings and remove or correct any negotiable issues.