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Despite what they say, sometimes you can fight fire with fire. In the case of finances, you can combat a poor credit rating with taking credit.
Anyone who’s suffered a poor credit rating knows how limiting this can be on your ability to borrow. This in turn isn’t very useful to you or your financial independence and stability. Yet there are ways to resolve this. Borrow more successfully and you can turn this credit rating around.
Credit cards
A good way to do this is through a credit card. Credit cards allow borrowing in small amounts, meaning you can build up a strong history of borrowing through the card. Pay off what you borrow on time and you may not have any interest added either.
Furthermore, companies like aquacard also offer cards for those with a bad rating to help with this purpose. If you can’t get a normal card, this can often prove more beneficial. In any case, it’s a good idea to find out about poor credit cards and see how they can benefit you.
Ratings
This won’t completely turn around your rating but it’s a very good start and will do a lot of work. Revolving credit, such as a credit card, is a great way to build up a rating. It’s also one of the areas that those offering instalment loans, which are often larger, will look at.
In many ways, it’s very much a ladder of progression. Creditors often look for a previous history of borrowing and credit cards are a good example for this.
Financial support
Credit cards such as this are your best means of improving your credit rating as well as allowing flexible lending. Borrowing effectively is a great way to maintain your financial stability and independence.
Since there is often no interest if the balance is paid on time you can plan your finances more effectively. It’s a great way to resolve one-off small payments since it doesn’t cost you additional money.
Likewise, other cards, such as the aqua Advance credit card from aquacard, reduce the interest rate over time as a reward for keeping to your credit limit and repaying on time. Aqua Advance gives an annual reduction of 5% in APR for three years so you could end up with a very competitive interest rate. .
You should mention that applying for credit cards lowers your rating as does averaging a balance near your limit. The older a credit card is and the less of its credit you are using, the more it helps your credit score.