A bad credit score can have abroad impact on your life — from delivering higher interest rates on loans to complicating your next rental apartment application.
With all this on the line, it makes sense that you want to change it.
Here’s the good news — no score is permanent, even if you dropped to the lowest category. Credit scores are dynamically tied to your borrowing habits, so your three-digit number will change as you take out loans and pay bills.
If you change your borrowing habits, you can eventually raise your score from whatever low number it is today.
Until then, you might face some challenges, but don’t worry—this guide is here to help. Whether you need to borrow a cash advance today or just want to beef up your score for the future, keep scrolling. Here’s what you can do with bad credit.
What to Do if You Need to Borrow Today
The unexpected doesn’t wait until you manage to pull up your score to a prime rating. They can happen at any time, even when you’re least prepared to borrow.
If you find it hard to get approved with your current score, try your luck with online loans. Going online increases your selection, with many different types of advance loans available today. While you might not be approved for all of them, the odds of finding a cash advance for which you qualify are higher than if you only applied with your local bank.
While borrowing with bad credit may be harder, it isn’t impossible. Now that the pandemic is over, lenders are loosening some of their toughest approval standards. According to the Wall Street Journal, lenders gave borrowers with bad credit a record-breaking $22.9 billion in personal loans in 2021 — that’s a 34% increase from 2020.
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Practical Tips to Increase Your Credit Score
Knowing a cash advance may be available can give you peace of mind. But ideally, you won’t have to borrow until you can manage to increase your score.
Let’s get candid — there’s no way you can convert your bad score into a perfect one overnight. Negative entries cling to your reputation for years, during which time they will affect your score until theyexpire.
But don’t give up. Every positive entry you add to your report in the meantime will count that much more once the bad stuff disappears.
- Pay Bills on Time: According to FICO, payment history accounts for 35% of your credit score, so you should focus on making timely payments. You should make a budget to help you pay all your bills on time, including credit cards, online loans, utilities, and other regular expenses.
- Reduce Credit Utilization: The next greatest share of your credit score is your utilization. This represents how much of your overall line of credit you use at one time. Experts suggest keeping your credit card and line of credit balances well below 30% of your available credit limitfor the best results.
- Dispute Errors on Your Credit Report: Regularly review your credit report for any errors or inaccuracies. Dispute incorrect information with the credit bureaus to ensure your report reflects accurate details.
- Seek Professional Guidance: Consider consulting with a credit counselor or financial advisor who can provide personalized guidance. They can help you develop a customized plan to improve your score and offer insights into debt management strategies.
Stick with It!
Improving your credit is tough, but it’s possible. With perseverance and the right strategies, you can pave the way for a brighter financial future.