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I’ve Paid Off My Debts, Now What? Tips for Rebuilding Your Credit Rating

If you’ve finally paid off all your debts and no longer owe any money to anybody, then you’re probably feeling relieved, pleased, and excited about the future. However, if your credit rating has suffered as a result of being in debt, then you will have your work cut out to help rebuild it and put you in good stead with any potential lenders in the future.

Although you may want to stay away from any further borrowing for the time being, you never know when you might require a credit check in the future, for example if you decide to purchase a house, get a car on finance, or even take out a brand-new iPhone on a contract deal. So, what can you do to get your credit rating moving upwards quickly? Here are our top tips.

Tip #1. Borrow a Small Amount:

Borrowing any money might be the last thing that you want to do after paying off all your debt, but borrowing a small amount that you know you’re able to repay quickly can be a good idea to boost your credit rating. Take a look at the loans for bad credit on this website; they are designed for short-term use and you’ll be able to pay them off in full and forget about them merely weeks or months after taking them out. You don’t even have to use the money – just borrow it and pay it back, to have a positive impact on your credit file.

Tip #2. Use a Credit Card Wisely:

If you have a credit card, or can get one, then it’s a good idea to take one out and use it wisely to improve your credit rating. Even if you get the card and then keep it stashed away for emergencies, simply having the line of credit open in your name will go in your favour on your credit rating, since it shows that lenders are still willing to provide you with funds. If you can’t get a regular credit card due to your credit history, then a credit builder card could be the perfect option for you.

Tip #3. Avoid Applying for Credit You’re Unsure Of:

Bear in mind that any hard searches and credit checks will show up on your credit file, and being rejected for credit recently won’t do your score any favours. So, to avoid this happening, it’s a good idea to avoid applying for any credit that you’re not sure you will be accepted for and wherever possible, use eligibility checker tools that do not affect your credit rating but provide you with the information you need about whether or not you’ll be accepted.

Tip #4. Check Your Credit Rating Often:

Lastly, keeping on top of your credit rating and checking your score each month is an essential part of the re-building process. It’s a good idea to check your score across the three different agencies, and keep your eye out for any potential mistakes or errors that could be bringing your report down.

If you found these tips helpful, we’d love to hear your feedback!