Tricks That Can Help You Climb Out of the Bad Credit Hole

Bad credit can hold you back from doing things like buying a car or house or renting a house. It can even affect what kind of jobs you’ll likely be able to get. 

However, having bad credit isn’t the end of the world. You can still fix it. If you have found yourself in a bad credit hole, you can climb out of it by utilizing the following tricks.

Pay More Than the Minimum on Your Credit Cards

Maxing out your credit cards can really tank your credit score. Ideally, you want to utilize less than 30 percent of your available credit. You can improve your credit by paying more than the minimum payment on your credit cards each month. 

This will allow you to pay them down faster and lower your utilization overall. Even paying a few extra dollars each month can help you pay off this debt a lot faster.

Get a Part-time Job

It’s not uncommon for many individuals to not have any extra money left over that they can use to pay off some of their debt. If all your money is going towards bills, then you may want to consider getting a part-time job. 

By working just a few hours a week, you can earn the money that you need to get out of debt a lot faster than you would have otherwise.

Negotiate With Debt Collectors

If you aren’t able to pay your debt for several months, those that you owe may seek the assistance of a debt collector in order to try to collect the money that you owe them. 

While it can be scary to get a notice in the mail that a debt collector is now handling your debt, you may find that they are willing to work with you. 

Many debt collectors will allow you to make payments on your debt for an extended period of time. If you have a lump sum of money available, you may be able to settle your debt for a fraction of what you owe them.

Seek Credit Repair Services

It can be difficult to repair your credit on your own. This is why many individuals seek credit repair services. They can look at your circumstances and credit profile to give you specific advice as to how you can climb out of the bad credit hole.

Bad credit may feel insurmountable, but there are plenty of things that you can do to climb out of this hole. Though it’s easy to be overwhelmed and to try to ignore your debt, it’s important that you deal with it and that you commit to paying it off no matter how long it will take. Once you pay off your debt, you’ll see your credit steadily grow over time.

Know About 5 Challenges of Bad Credit Borrowers

No one plans to accumulate debts and invite the credit hassles. But sometimes, personal or financial emergencies cripple your life plans. Be it insufficient income source or excessive expenses, as you struggle to repay loans, missing a loan instalment would hurt your credit score. Besides, living in the state of stalemate is never good for your financial health.

Bad Credit Borrowers

Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. 

Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue. 

The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.

It is better to take charge of your life as early as possible and search for viable funding options such as swift short term loans or debt consolidation loans in UK. 

The choice would entirely depend on your credit health. Factors such as required loan amount, loan purpose and your credit affordability would help you make a better decision.

Bad Credit Loans

Searching for bad credit loans would not be a cakewalk, and only persistent efforts in the direction would help your cause. 

To make things convenient you may consider using services of an experienced loan broker in the UK. You can contact an FCA authorised broker and avail hassle free access to deals according to your credit situation. 



Most brokers share tailored loan advice free of cost to borrowers and there is no upfront fee involved. You also save a lot of time and headache required for searching a deal.

Now before you contact a loan broker for bad credit loans without guarantor, it is important to understand following points about bad credit borrowing:

1. Cost of bad credit loans

With low credit score, your loan eligibility is low. Your loan application is marked risky and most lenders would cost high interest rate. 

Whether you need instant payday loans or instalment loans for bad credit, you would get expensive loan with higher processing fees. Thus you should be prepared to shell out more from your pocket with poor credit rating.

2. Do not borrow more than what you need

Contacting a loan broker you are likely to get access to available bad credit loans. However before you choose any of the deals made available to you, make sure you restrict yourself to the amount you compulsively need. 
Do not borrow more than what you need. For borrowing more than your requirement could make it difficult for you to manage your repayments later on.

3. Always check the credentials before availing a deal

Also it is important to ensure that you make a transparent deal with a reliable lender. It is recommended to deal with registered loan partners only. 

Herein you must also know that it is illegal to lend in the UK without a license. Check all the credentials and read documents carefully.

4. Have a repayment plan

While choosing the loan for your situation, make sure you pick a loan that has affordable monthly instalment. 

When you borrow according to your repayment capacity, you are more likely to succeed at the loan repayment. You could peacefully repay the loan and build good history.

5. Impact of bad credit loans on score

When you borrow despite poor rating, it certainly brings on red flag on your report. However repaying the loan on time you build good history and improve your credit score. 

In fact, with rightful planning and discipline you can use instalment loans to mend your credit score.

Bad Credit? What It Takes to Up Your Score

Having a poor credit score could make it harder to get low interest rates on loans or find a job. It may also make it harder to find an apartment or get approved for a cell phone plan. Let's look at some ways that you can improve your bad credit no matter how bad it is now.

Make Your Future Payments on Time

Depending on your current credit situation, it may not be wise to pay old late or missed payments. This is because creditors generally can't pursue them after a certain number of years. 

One exception is if you choose to pay the debt off or make a partial payment as that restarts the statute of limitations clock. Ideally, you should focus on making your future payments on time as the most recent information on your report gets more attention than older information.

Nothing Gets Reported Forever

Except for a Chapter 7 bankruptcy, information on your credit report remains there for seven years after is first added. If you do file for Chapter 7 bankruptcy, it will remain on your credit report for a decade. 

Therefore, simply making better decisions today and avoiding any future missed payments or black marks will necessarily lead to better credit.

Monitor Your Credit Report

If you were to ask credit repair professionals their top 10 ways to improve a credit score, credit monitoring may be on those lists. This is because an error on a credit report could reduce a person's score by dozens or hundreds of points. 

If a person is a victim of identity theft, it may be months or years until he or she realizes what has happened. By then, the problem may be much more difficult to solve.

Talk With Your Creditors

It may be possible for one or more creditors to agree to accept less than what you currently owe to settle a debt. If debt forgiveness is not an option, it may be possible to get a lower interest rate on future payments. 

This may help you reduce your debt balances, which could lower your debt-to-income ratio. Ultimately, reducing your debt can help improve your credit score.

If you have a bad credit score, there is no time like now to start improving it. In as little as a few months, you may notice that efforts to increase your score are starting to pay off. 

Over the course of 12-24 months, it may be possible to go from having subprime credit to being labeled as a responsible borrower.

How to Get a Loan with a Poor Credit Rating

Whether it was reckless spending that soon taught us a lesson, mismanagement of our repayments or a genuine inability to pay back what we had borrowed, at some point in our lives many of us will find ourselves with a poor credit rating. 

This however does not necessarily mean we can simply afford to forego borrowing any more money, nor that we would not be able to better manage a loan now and though getting a lender to agree to a deal might not be so easy, there are a number of things you can do to increase your likelihood of getting hold of the cash you need.

Expect rejections

Applying to one bank and then giving up upon rejection will get you nowhere. With a poor credit rating, you are immediately a candidate for refusal and should enter into talks expecting the worst while hoping for the best. 

Rejection from one institution does not mean that nowhere will accept your application; time and patience will be required.

Negotiate interest rates

While you still want to get the best interest rate you can possibly get a lender to agree to, you have to understand that the compromise for being accepted with a bad credit history is paying higher interest rates. 

Seeing you as a risky investment means that banks will want a bigger return on their money and as much as it might sting, you have to be willing to accept this if you want the loan application to be approved. 

Be wary of Payday loans

While you are more likely to be accepted for a payday loan, you are also more likely to find yourself in deeper financial trouble if you accept one. 

These short-term loans for small amounts of money are designed to tide you over between pay cheques but they come with huge interest rates and massive penalties should you not pay it off on time. 

So many consumers have found themselves crippled by such loans that there are even investigations underway as to how unfair they may truly be.

Keep it to a minimum

The more you ask for, the more likely a lender is to decline you if you have a bad credit history. Carefully working out the minimum amount you need to borrow and being sure to decline any extras such as Payment Protection Insurance that would boost payments and the investment will seem less risky to the lender, encouraging them to say yes.

Improve your rating

Perhaps the best way to increase your chance of a successful loan application is to actually improve your rating, repair your credit score fast thus making you seem like a safer investment. 

Paying off all other outstanding debts by being punctual and organised with repayments will soon help towards this. Another good tip is to lock away your credit card and try not to use it; as this way you will never exceed your limit or fall behind on payments, allowing your rating to gradually improve without actually doing anything.

Ask elsewhere

Banks may be the traditional source of money but other options are available. Borrowing from family and friends is a great way to get better interest rates and a more lenient repayment schedule. 

Just be sure to write up formal documentation outlining any agreement; the last thing you want is to lose loved ones over squabbles with money if things go wrong.