If you believe that when you borrow money from someone or from a bank, be sure that you still have extra to pay for this despite of all the other monthly bills that you receive. Being aware of how much you are paying for your monthly expenditures and how much you are earning from your current job – or jobs – will surely give you the idea if you can pay for an extra credit if a certain problem calls you to borrow money.
Before anything else, make a Budget
For you to clearly know, without any doubts, if you can pay back what you have borrowed, make a monthly budget. This method will tell you if you still have extra cash to spare for you to pay for the money you owed.
Go Over on Your Finances
Go over with what you have spent and have earned per month and take a look at it closely so you could see if you can really pay your bills or debts on time, or so you could check if you have extra money in case you are jobless.
When you are finding yourself struggling to pay for all the bills plus the current debt you have, the best thing to do is to go over it again and scrutinise, and find a way in which you can decrease the debts that you are currently having. The thing here is do not add more debts into what you are having now. For all you know it, the money that you are earning will all be put to the debts and the interest rates it has.
Are You Convinced that You Can Pay what You have owed?
If you have calculated that you still have extra money to spare for you to pay for the borrowed money, think hard about it before reaching a decision that you cannot turn back. You have all the time in the world to review your budget and make comparisons of other credit options. This way you will surely find the right one that would suit you well.
Spending and Earning an Equal Amount of Money
After such time of deep review and scrutiny, you have discovered that you do not have the enough amount of money to pay for future debts. This would obviously tell you that borrowing money is the worst decision you will ever make. If this is the case, discipline yourself not to borrow. Do not give yourself or your family a hard time.
Even the current monthly bills that you are having are even a battle for you that you keep on facing and cannot stay away from so putting another stack on it will give you more obstacles to face. Nevertheless, paying no attention to your problems will solve nothing. Clear your mind first and try to make a plan of action for these problems, especially those debts that have a deadline that you need to catch. If it is beyond your control already and you have no more plans in mind, do not hesitate to ask for advice from charities that are indeed willing to help you.
How Can You Improve Your Credit Rating?
Your credit rating would be affected based on how often you have borrowed money by swiping your credit card for items you need and you only want to have; mortgages and even a number of loans. But when your credit rating has its red flag up, that is now a sign that you have to do something to improve it before it totally damages you. If you think you can still save your rating then do no worry. There are still some ways in improving your credit score, and a detailed guide can be found here http://www.learnmoney.co.uk/credit-file/badcredit.html.
Why Credit Scores are Highly Essential?
Your credit rating is what makes lenders approve and reject every time you come to them to borrow money. But if they do approve, the amount that you may want to borrow might not be given to you because of what they have seen on your credit rating. Also, your credit rating is what they will be basing your interest rates on which will then be put on top of the money you owed them.
Things that Affect Your Credit Rating
There are certain factors that you have to keep in mind as a client that borrows money from banks and money lending firms so your credit rating will not be put into danger. Go over the list of things here that would be the possible negative outcomes and check yourself if you are experiencing one of these:
- Your debts are piling up nonstop. No banks, people or any moneylender will fully trust you again if your debts are stacking up.
History of delayed payment and overdue water and electricity bills, loans and mortgages. To anyone’s dismay, this is will be greatly marked on your record for the next six years.
- Failure to pay for your pre-existing and existing bills result in a County Court Judgment or a CJJ. This will also be noted in your record for the upcoming six years.
- Applying for more than one credit card in a short amount of time will also be noted down your credit record. The better way to avoid this is to request a credit card one at a time. Wait for a couple of months before requesting for another one again. But if your purpose is to only know the credit rates then you can just ask the moneylender about. That way, you are not jeopardizing your credit report.
- Lenders do not just monitor how often you are using your credit cards. They are also checking up on those people who possess more than one credit card that you are not even used.
- Lenders also keep track on your report for your errors and flaws so they could give their evaluation on the client’s credit score. If you notice any mistakes in your data or information, contact the credit reference agency immediately so they could make the necessary changes without compromising your credit report. Situations like someone has applied a credit card on your name and is currently using it will be investigate straightaway and be put to stop as early as possible.
- Lenders can check your identity if you are a registered voter.
- If you keep on moving from one residence to another in a short period, lenders are having hard time trusting such people since it would be a burden for them to look for the client.