It’s important to keep a close eye on your finances. One wrong move can affect you for several years into the future, and can ultimately prevent you getting to where you want to get in life.
That may sound dramatic, but if for example you find yourself short and unable to pay an important bill at the end of the month, a missed payment can be marked against your name, thus damaging your overall credit profile.
A damaged credit profile will leave you less likely to be in a position to have the freedom of which lender to use in the future. This means you will likely be paying over the odds for finance for many years to come.
It’s a cycle you certainly don’t want to find yourself in, so making sure you keep on top of your finances now can prevent this from happening.
Paying your bills on time, including to credit card companies, banks, flexible loans, will boost your profile month on month. A creditor will assess your ability to payback by looking at your history of repayments.
If they are not satisfied that you have been able to service your other credit commitments successfully, they will be less inclined to provide you with what you are looking for.
Planning is key. Understanding what you have coming in against what you have going out is crucial to ensuring you are presenting yourself as a safe investment for lenders in the future.
If you have missed payments in the past, do not panic. Any fair lender, to a certain point, will understand that there are occasions when payments can be accidentally missed or just slightly delayed.
To repair a history of a few missed payments, you must build a longer history of successful payments. If you have missed payments and no credit to prove you are still a good customer, you must source some new form of credit that you need and can afford and repay it on time and in full on a regular basis.
These products can include mobile phone contracts, credit cards or payday loans. A payday loan lender, for example, will notify credit reference agencies of a successful payment, thus helping to boost your overall profile.
Taking out too much finance that’s not needed, regardless of whether you keep up on the repayments or not, can have an adverse effect on future applications. For example, if an underwriter sees that you have small outstanding balances, but that you also have access to £50,000 in credit card funds, they may mark you down as a risk, as the potential is there for you to find yourself in unmanageable debt.
So, in conclusion, ensure you plan thoroughly and pay your bills on time, use credit wisely and to your advantage.
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