It’s obviously not ideal to get yourself into a situation where you’re buried in debt and your credit score is damaged. If you’ve been running up exorbitant credit card bills and struggling to pay them off, that can put you in a bad spot, making it difficult to secure financing for big financial moves like buying homes or cars.
Having said that, a bad credit score is not a reason to panic. The last thing you want to do in this situation is overreact to it, making desperate moves to restore your financial health that might ultimately do more harm than good. Quick fixes don’t exist; savvy, reasonable steps in the right direction are the only way to go.
Don’t believe in the quick credit fix
When you have bad credit, it’s easy to start panicking about things. You’re probably concerned about major life crises such as how to get a mortgage with a bad credit rating. This panic can lead you to pursue quick, ambitious fixes for your credit. According to the Australian Securities and Investments Commission, however, these are unlikely to work. If someone says they can “fix” your credit, they’re probably wrong.
The reality is that information can’t be removed from your credit report unless it’s legally proven to be incorrect. If you have significant amounts of debt in your credit history, that’s a fact you can’t easily hide from. The only thing you can do is address it head-on.
Taking steps toward a healthier future
If you want to have a healthier financial future and reach the point where you can safely take out low-doc loans like anyone else, the best course of action is to make steady progress on your debt. Bankrate recommends finding outstanding balances you can afford to pay off, and chipping away.
“A good way to improve your credit score is to eliminate nuisance balances,” said John Ulzheimer, a credit expert at FICO and Equifax. “Those are the small balances you have on a number of credit cards.”
In the meantime, you should know that the loans you need might still be available to you, even if your credit is bad. If you’re looking for bad credit home loans, for example, you can reach out to Redrock and ask. There’s a good chance that the funding you’re looking for is still available, and at terms that you’ll be amenable to.