Even though you may be paying on time for your loan repayment and credit cards, there are some situations in which you will fail to pay. You may forget the payment date, or you might have an unaccounted emergency expense causing you to not afford to pay for your debts. Either way, you will need to have a good knowledge of how to clear bad credit history Singapore. If you would like to recover from a bad credit score, we are here to help you. In this article, we will discuss some of the ways in which you can recover from your situation.
Without further ado, let’s start:
Take out a loan and pay it on time
If you have unpaid debts on your credit history, you can improve it by taking out a loan and paying it properly. By doing this, you will be negating the unpaid debts on your record even by a small margin. Any improvement on your credit score is welcome since it can be the start of its recovery. Just be sure to continue keeping up on your other bills and financial obligations, since it will do you no good if you take out a loan that you pay well if you are still failing on your existing bills. Having said that, let’s move on to the next tip on our list.
Do not miss repayments on your remaining loans
After you have failed to make a payment the first time, make an effort not to fail on any payments again. Doing so will just make your situation worse. Regardless of your bills being a payment for credit cards, loans, utilities, or mortgage, paying them on time will guarantee that your credit score will not go down even lower. The best solution to remain updated on your due dates is by taking advantage of a direct debit arrangement.
Establishing a direct debit for your payments is especially useful if you are forgetful when it comes to the due dates of your bill. Just one missed payment and your credit score will be negatively affected for a long time.
Try arranging a repayment plan with your loan provider
Contacting your loan provider and asking for a modification in your repayment schedule can be worth it, especially if your loan provider is a reputable company. If your lender is sympathetic to your monetary problems, they may be able to do something to rearrange your payment schedule into something that is manageable. If you are a good customer, you will have a higher chance of pulling this off. Even if the company did not provide you with a loan payment schedule readjustment, it is still worth the try.
Check for errors on the lender’s part
Your lenders and credit facilities can make mistakes. If you notice that your credit score went down for no reason, it might be due to an error on the part of your loan company. To prevent these types of errors, it is recommended that you verify the accuracy of your credit report every month at least. The errors that you must watch out for include incorrect payment date, error in your name, and your payment status being erroneously reported.
Slash your credit balances by making use of your enough cash
A good way to repair a low credit score is by decreasing the total amount of your debt. This may be really obvious, but this is an advice that must be mentioned nonetheless. There are a lot of people who retain their saved money when they are struggling to pay off their debts. Doing this is not a great idea if you have a low credit score, especially if you have a lot of unpaid debts. Paying your balances using your savings will allow you to save money on interests on those debts. Most of the time, the interest that your savings will earn is much lower than the money you will save by cutting on your debts and their corresponding interest rates.
Even though it may feel good to have savings, it will save you more money in the long run to just spend your savings to pay off debts.
Think about getting a prepaid card should you be unable to obtain a credit card
A prepaid card has less strict requirements compared to a credit card. For instance, there is no need to go through a credit check when applying for a prepaid card. A prepaid card, however, needs to have funds in order to be usable, and you can only use the amount that you currently have on your card. Despite that, they will still contribute positively to your credit score as long as your prepaid card features a monthly fee. The increases in your credit score might be minimal with a prepaid card, but it is still a welcome improvement. Additionally, they will help you recover from a bad credit score in time.
With a prepaid credit card, a notice of successful monthly repayments will be documented within your credit profile as long as you pay on time. This is similar to our first tip, however, taking out a loan might be problematic since you will have to take out a predetermined amount. With a prepaid card, you are free to choose the amount of money that you want to top up to your card.
Are you looking for a licensed money lender in Singapore that you can loan money from in order to increase your credit score? A1 Credit is a great choice for that purpose. They offer fast approvals and low interest rates so that you will be able to start improving your credit score through loans more quickly. Click here to visit their website or give them a call at 6336 0833.