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How To Get Financial Help Even With A History of Bad Credit

If you have a bad credit rating, you will probably find it frustrating how many doors are closed to you because of it. Many of us receive a bad credit rating when we are first starting out on our own, and because of that one unpaid debt you can have a mark on your credit record for 5 years. You might have gone through a rough patch in which you lost your job and was unable to pay bills. Whatever the situation that led you to it, having a bad credit rating can be a very restricting thing. You will probably get turned down for loans, credit cards, even a cell phone plan. It seems like no body is willing to give you a second chance when you have bad credit, right? Well, this is not necessarily true. In fact, there are several avenues still open to you if you need financial help.

Bad credit loans

There are a number of loans out there that can be awarded to people who have a bad credit rating. These are specifically marketed as “bad credit loans? or “no doc loans?, meaning that if you have bad credit or do not have acceptable documentation you can still apply for this type of loan. If you need to get a loan for a car or some other reason, and you have a history of bad credit, then this sort of loan will probably be the only type you will be able to get. They can be a big help to you if you find yourself in a tough situation, however there is also a downside to a bad credit loan. Specifically, the bad credit loan will carry much higher interest than a regular loan of the same amount. This means that throughout the life of the loan you will be paying back much more in interest than someone with a normal loan might. It will definitely cost you more, but having the option there is definitely handy and can get you out of a difficult situation if need be.

Credit cards

You might think that you will never get a credit card if you have bad credit. However, there are credit cards out there that will be awarded to those with bad credit. Yet, as with the bad credit loan, these credit cards carry a much higher interest rate than a regular credit card, so your repayments will normally be higher. Because of this you will only want to apply for a credit card if you are certain you can make the repayments. And make sure you use it sparingly – the last thing you want is to build up an unpayable amount and then have the interest to pay on top of that. That is a situation that will only result in you getting more marks against your credit rating.

How to rebuild your credit

One of the most important things to do if you want to regain your financial freedom is to start proving that you can manage your money well. That is why you might consider getting a bad credit loan or credit card. If you make all of your repayments, and always make them on time, then after a period of time you will have proof that you have the ability to be financially wise. This will go a long way if you want to apply for a home loan or something of a similar magnitude in the future. In this case it will also help to show that you can save your money, so you should open up a designated savings account into which you pay money on a regular basis. All of these things look very good on paper, so try to do this as much as possible.

The most important thing is that you ensure you do not get yourself into a default situation again. Your credit rating will improve after 5 years, and you will want to keep it looking good. Make sure that you pay all of your bills on time, especially any that are being paid to the bank, and make sure that you have plenty of money in savings for emergencies. Try to keep in mind that you should not live beyond your means – do not spend money that you do not have, and do not make the mistake of putting everything on a credit card. Being smart and savvy is the best way to ensuring that you do not end up with bad credit ever again. Bad credit is something that is unfortunate, however it is important to remember that it is not the end of the world! By following the tips above you will be able to not only get financial help, but you will be able to ensure that your credit stays well within the range that it should.