MAY 23, 2024
Understanding and Avoiding Poor Credit Scores
don't let confusing jargon and lack of education around credit scores come back to bite you
In today's financial climate, maintaining a good credit score is more crucial than ever. Your credit rating affects your ability to secure loans, favourable interest rates, and even impacts job opportunities. But how does someone end up with a poor credit score?
Let's unpack this in simple, jargon-free language, and provide you with practical tips to avoid falling into the credit trap.
What Leads to a Bad Credit Score?
Missed Payments and Defaults: Missing loan or credit card payments can significantly harm your credit score. Each missed payment is recorded, signalling to lenders that you might be a risk.
High Credit Utilisation: Utilising a large portion of your credit limit can lead to a lower score. Lenders often see high utilisation as a sign of financial distress.
Applying for Too Much New Credit: Each time you apply for credit, a hard inquiry is made, which can slightly lower your score. Several applications within a short period can compound this effect.
Having Only New Credit Accounts: A short credit history provides less data on your financial behaviour and may lower your score.
Collection and Bankruptcy: Being sent to collection for unpaid debts or declaring bankruptcy has a severe negative impact on your credit rating.
Tips to Maintain a Healthy Credit Score
Empowerment Through Awareness:
Pay on Time: Always aim to pay your bills on time. Set reminders or automate payments to avoid missing deadlines.
Keep Balances Low: Maintain low balances on your credit cards. It's advisable to keep your credit utilisation below 30% of your total limit.
Be Wise with Credit Applications: Only apply for new credit when absolutely necessary. Avoid multiple credit applications within a short period.
Diversify Your Credit: A mix of credit types—like instalment loans, credit cards, and retail accounts—can positively affect your score.
Monitor Your Credit Report: Regularly check your credit report for any inaccuracies. Dispute any errors you find to keep your report accurate
Supportive Guidance:
At Boshhh, we believe in supporting you through your financial journey. By choosing our services, not only do you get a product designed to help rebuild and improve your credit score, but you also gain a partner committed to your financial health.
Trust and Transparency:
Our unique product offerings, like the guaranteed acceptance sim-only contracts that report back to credit agencies, can help you positively influence your credit score over time. We provide a straightforward path to improving your financial standing while keeping you fully informed about the progress you are making.
By understanding the factors that affect your credit score and following these straightforward tips, you can take control of your financial future. Remember, improving your credit score is a journey, and Boshhh is here to empower, support, and guide you every step of the way. Let's work together to reform, repair, and rebuild your credit!
For more information, visit our website – we’re here to help you achieve your financial goals!
