Tag Archives: credit score

Can Payday Loans Repair Poor Credit Scores – Revisited

So can a payday loan or short term cash advance really help a poor credit rating?

I was re-reading an article on payday loans and credit scores that I wrote back in November 2011 and realised that it hadn’t really answered the question.

Well – it hadn’t answered the question to my satisfaction, which is why I felt it needed addressing again – so consider this article it’s official SEQUEL!

After looking at payday loans and the way they’re administered and whether they actually appear on credit scores I finally came to a conclusion that I was happy with.

A number of years ago, when monthly cash advances first made their mark in the UK, the industry was still too fledgling and too far removed from traditional financial services for it to be considered as a credit scoring factor. However, more recent research suggests that this is no longer the case.

When you take out a payday loan with a reputable supplier – be it Wonga.com, PaydayUK or QuickQuid, the loan will appear in your credit score.

More importantly – when you repay the short term loan this will also appear on your credit score. This suggests that payday loans could be more useful than a simple emergency source of credit.

Think about it for a minute… you badly need credit to help pay bills or help buy a new car. Unfortunately no one will lend to you because your credit history is just too poor.

But hang-on a second – you’re no longer the irresponsible spender you once were. But the lender or credit card company doesn’t know that – based on your credit score.

So you turn to a payday lender for a quick, short term loan – you repay the full amount at month-end. This positive repayment is shown on your credit history – indicating that you are once again a good bet.

Now I’m not advocating payday loans as the saviour of poor credit scores… but this example surely shows you the potential.

How to Control Anxiety Over Bad Credit

It’s not uncommon to find yourself in a poor financial situation. Layoffs, underperforming investments, unforeseen expenses, and budgeting mistakes can all lead to issues with managing your finances, and when those issues start to cause debt, it can lead to bad credit.

Bad credit affects people more than just financially. It can also lead to a great deal of stress. Those that are suffering from bad credit often feel as though their lives are going to be forever changed – as though they will be unable to overcome their credit issues.

This can cause a lot of stress, and indeed, it appears as though many people suffer from anxiety issues because of their financial situation. That’s why it’s important for your mental health to control this stress while you rebuild your credit.

Tips to Control Stress Due to Bad Credit

· Create a Financial Plan

Easily the most important tool for controlling your stress is to have a plan in place to rebuild your credit. Your budget should be planned out as best you can, with details that will ensure that you keep to it. Financial planning gives you an eye towards the future, and it shows you how you’re going to make sure that your credit score sees genuine improvement over time.

· Create an Emergency Account

Related to creating a financial plan is creating some type of emergency account that you can use to pay off bills in the event of an unforeseen expense. It’s not just planning for the unforeseen expenses – it’s also preparing for the other bills you need to pay in order to keep rebuilding your credit. When you have this emergency account, you’ll find yourself less concerned about what happens if something comes up financially.

· Learn Proper Credit Strategies

It’s also a good idea to take some type of credit class or research smart credit decisions. When it comes to controlling your anxiety about your finances, knowledge provides a great deal of power. As long as you know what the right decision is each time, you won’t doubt yourself and you’ll be far more confident when you’re dealing with your debt.

· Organize Your Bills and Bill Pay

Organization is also an important tool for reducing the stress of low credit. You know that you’ll have to make every payment from now on, and if you’re still finding every bill and forgetting which ones are due when, you’ll put yourself in a position to panic. Sign up for bill pay when possible, and make sure that you have some type of reminder calendar to ensure that you make each payment on time as needed.

· Find Free Finance Hobbies

Finally, it’s helpful to get a little bit of extra money in your pocket when you can, in order to fund the emergency fund and decrease the stress you experience over finances. See if there is anything you can do for free (no financial investment) to earn a bit of extra money. Even something like mowing lawns or starting a blog can be beneficial. You may only work a couple hours per week on these projects and make very little, but that extra money can fund your account and reduce some of your financial stress.

Controlling the Anxiety of Poor Credit

One of the main reasons to have good credit is so that you can improve your quality of life. But if you’re letting the stress of overcoming your poor credit impact the way you feel, then you’re not experiencing that quality of life you crave. Use the above tips to reduce anxiety while you rebuild your credit and you’ll find that you’ll not only improve your credit score – you’ll improve your life as well.

About the Author: Ryan Rivera experienced significant stress from his financial decisions. He has a website about controlling anxiety at www.calmclinic.com.

Applying for credit isn't always what its cracked up to be. For many people with a poor credit history it's certainly not that simple.

With the British economy in the dire state it’s in many people are struggling to meet monthly payments. Unfortunately this can have severe consequences on personal debt as well as on the customer’s credit score.

Council tax bills and credit cards tend to be the most commonly missed payments – which will hardly come as a surprise to many. However, the likes of payday loan repayments are probably not too far down the list either.

So what can you do to ensure that your credit score is in tip top condition for the year ahead? Check out these top tips:

Pay off existing debt.

If you are looking at applying for a credit card, payday loan or other form of credit then it’s really important that you make sure you have repaid any existing debt you may have. Whether this is in the form of unpaid council tax bills, outstanding credit card balances or utility bills – it’s important to make sure your credit history has a clean bill of health.

Sign up to the Electoral Roll.

This might sound odd but did you know that signing up to the Electoral Roll is one of the best ways of improving your credit schore? A number of credit referencing companies actually check against the Electoral Roll to help fight identity fraud. This is why it’s essential that you make sure you’re signed-up to it.

Check what the credit reference firms have on file about you.

We see these adverts almost daily – especially since many of us spend so much time on the internet. However, it’s important to consider signing up to the likes of Equifax or Experian to keep a close check on your credit score. This not only gives you information on your credit history but it will also flag up any repayments you may have missed. It can also help to keep track of potentially fraudulent activity on any of your personal accounts – allowing you to remedy any issues that may arise relatively quickly.

Do you have a credit history?

If you are lacking a credit history then it can be difficult to obtain any form of credit… sound strange? Well it probably is, however, lenders are less likely to trust customers who have no history of borrowing money. This is largely because lending firms are unable to see how you behaved previously when it comes to repaying debt – as a result they will be unable to predict how you are likely to behave when it comes to repaying the loan they extend to you. This sounds incredibly unfair but there are loan and credit card companies out there who will lend – however you may be restricted to a low balance and you may start off paying a higher rate of interest to begin with. In spite of this it is worth considering as this will improve over time and as a result you will improve your credit history as a result.

Security firm urges caution over online credit card spending

People using credit cards have been cautioned over giving out personal information to the wrong sources whilst online.

Security expert with Norton (the anti-virus firm), Con Mallon, has warned that people who use social networking websites such as Facebook as the most at risk since they are more likely to give away personal details without knowing.

Mr Mallon commented:

“Be careful about what information you post online on social networks such as Facebook, don’t willingly give out banking or credit card details – particularly over the phone. Keep your passwords safe, and make sure your computer is up-to-date with the latest security software.”

In addition to this, the increasing use of online banking has also raised security concerns about personal details being exposed to credit card fraudsters. Consumers are being recommended to to check their balances on a regular basis to ensure they have not been hacked by cyber criminals.

Norton is recommending that consumers do not access their online bank account via unsecured wireless networks or public portals. The most recent Norton Cybercrime report has revealed that almost 60% of consumers in the UK have been affected by credit card fraud and identity theft.

Finding the right bank account for your needs

Looking for a bank account to suit your needs? In this day and age it can prove difficult finding the right kind of current account for your personal requirements and each one undoubtedly offers different facilities, with different interest rates and charges. Managing your personal finances can prove difficult, which is why it’s vital that you choose a bank account that meets your needs.

So what are the basics that bank current accounts SHOULD offer:

The ability to withdraw money at any time of the day.
The ability to deposit money when needed.
Regular monthly statements.

A good bank account should also give you access to:

The opportunity to extend your line of credit with an overdraft facility.
The opportunity to add-on other extras such as credit cards.
Add-on high interest savings and ISA accounts if required.

When changing your bank account or if you’re opening a completely new account then you should be carefult as many banks may offer attractive introductory offers and benefits that may not continue in the long-term. It is certainly worth comparing accounts and shopping around for the best one to suit you.

Debt Management Plans – what are they and how can they help me?

Have you run up large debts on your credit cards or borrowed where you should have saved? This is a familiar story for many people, especially at the moment in the current economic climate.

A Debt Management Plan (DMP) is a common method used in the UK for paying-off personal loans and credit card debt. Usually these types of debt have spiraled out of control or are too big to manage yourself. A DMP can be setup between the debtor and an intermediary to help re-negotiate interest rates and re-payments with the lenders in an attempt to make the debt more manageable.

The intermediary, commonly known as a Debt Advisory Service, should recognise that it is important to suggest that the individual pays only what they can realistically afford after their priority expenses, such as mortgage payments, rent, food and utilities, have been paid before any money is taken by the Creditors (the lender / credit card company).

If you are struggling with managing personal debt and it is proving more than you can handle it is certainly worth speaking to Debt Management experts to find out what can be done to control it.

Debt Management

Simplifying credit cards - bringing them back to basics with Creditwindow

Let’s bring the whole credit card concept back to basics…

Simply put – a credit card is a form of loan. The credit card company / bank basically provides you with the credit card sets a limit on the amount you can spend on the card – known as your credit limit.
The credit limit is based on your annual income and credit score. You are entitled to use as much or as little of the available amount as you wish. The credit card’s interest is charged on the amount you have used, not on the credit limit itself (unless you have borrowed right up to that limit).

Whilst you could simply apply for a credit card through your bank you can also apply for a credit card online, and a credit check will be carried out as part of the application process.

It’s worth remembering that when you use your credit card to purchase something or to take out a cash advance you are basically borrowing money from the credit card company. Just like an unsecured loan, you have to pay back any money you borrow back as well as pay the necessary interest and associated fees on the loan for the convenience of using the card and the benefits it offers.

Every month you will receive a credit card statement that shows you exactly what you have spent and where. The statement will also tell you how much you need to repay by the due-date. It’s worth bearing in mind that, although the statement will show you the minimum amount you need to repay, you do have the option of paying more and should repay back what you can, especially since this will help to improve your credit score.

You have a set period to make the necessary repayment on your credit card (usually two to three weeks). If you do choose to repay the outstanding amount in full, you will not accrue further interest on the amount you borrowed. Otherwise, you will be charged interest on the amount left unpaid, and that interest will appear on your next statement along with the unpaid balance and any additional purchases you have made on the card since the previous payment date. It can prove risky to allow your credit card to build up interest and you could end up paying back far more than you originally borrowed – this is why it is so important to stay on top of your credit card debt.

All credit card firms and banks have a duty to make their terms and conditions clear. It is extremely important to go over the small print before you commit to taking out a card.

Here at Creditwindow you will find a range of credit card providers and can click through to learn more about each one.

Could A Payday Loan Make Or Break Your Credit Rating?

Find out how a payday loan could help or hinder your credit score.

Did you know that a short term loan or payday loan could make or unmake your financial future? Well maybe not… but it could help.

It’s incredible when you think about it – did you know that a payday loan can actually benefit your credit score? Well… as long as you pay it back in time and don’t default on your payments.

Payday loans are useful if you need money quickly as you never really know when you might have a financial emergency and need cash fast.

The problem is – it’s not really your money, it’s the lender’s money and, like anything you are lent – you have to give it back. In the case of a loan – that’s paid back with interest. An important point but funnily enough it’s not something that’s touched upon by credit or loan companies enough.

I guess the real question you need to ask yourself before taking out a payday loan is – “can I pay it back?” If the answer is an unquestionable “yes” – then great, however, if it’s a maybe or a flat no then my advice is – really don’t risk it. the likelihood is you’ll just end up getting in debt and harming your credit rating even more than it already is.

If you harm your credit score you will only end up harming your chances of taking out a mortgage (if you want to buy a house) or getting credit for that car you want or, in some instances simply paying for your shopping with that credit card when you’re low on funds.

This author recommends that you sit down and have a long hard think before you make a decision on whether you should consider a short-term loan or not. You have to decide whether the risk is worth it or not – the lender can’t give you that advice.

Can I open a bank account with a bad credit history?

Find out how you can open a bank account even if your credit rating isn't so hot!

Suffering from a bad credit rating can be a difficult situation to be in, but the answer is yes, you can open a bank account with a bad credit history – simply apply for a bad credit bank account and you shouldn’t be turned down because of your credit rating. Just like any other account, you’ll need to prove your identity and address and you will need some documents to do so, such as a passport or driver’s licence.

Why you can’t open some accounts with bad credit

If you have bad credit, you could be turned down for a ‘standard’ bank account: you’ll need to pass the banks’ credit checks to open all sorts of accounts.

If a bank doesn’t like something in your credit history, they can turn you down.

If your credit history includes something more serious than a few missed payments – such as defaults, a CCJ (County Court Judgment) or bankruptcy – where do you go for a bank account?

Bad credit bank account

A bad credit bank account is another term for a basic bank account. There is no overdraft with an account like this but you can still arrange Direct Debits, use cash machines and pay in an income, pension or benefits. A bad credit rating won’t stand in the way of opening one of these accounts.

The bad credit, bank account from thinkbanking doesn’t require a credit check and is even open to undischarged bankrupts. You simply need to prove that you’re over 18 and resident in the UK. You can find out more about the bad credit bank account here: http://www.thinkbanking.co.uk/bad-credit/.

This type of account can also be suitable for people with a moderate credit rating – those who don’t have any really serious issues with their credit rating, but who may have been turned down for a standard current account elsewhere, or who may like the idea of a bank account with no overdraft facility.

A Quick Guide To Personal Loans - unsecured loans, secured loans and guarantor loans.

A Quick Guide To Personal Loans - find out more about unsecured, secured and guarantor loans.

Unlike payday loans, personal loans are larger sums of money that you borrow over a long period of time.

The interest costs for personal loans can vary from lender to lender and will depend on whether the loan is secured or unsecured.

What is a Secured Loan?

A secured loan is a loan that is secured against an asset, such as your car or even home. If you are unable to repay the loan, the lender can sell your asset as a way of getting it’s money back. Whilst the APR interest rate on a secured loan tends to be less there could be additional fees and charges.

What is an Unsecured Loan?

Unlike a secured loan, an unsecured loan does not need an asset to guarantee the loan against. However, like any form of borrowing, you will need to repay the loan in full. If you fail to repay it the lender could take legal action against you in order to get its money back. It’s vital that you repay an unsecured loan in full as, if you default, your credit score could be severely damaged – meaning that you could be barred from taking out credit cards or personal loans for a number of years.

However, there are alternatives to unsecured loans, such as guarantor loans.

The only difference with guarantor loans is that they are secured against the word of a “guarantor” (a person who promises to repay the loan on behalf of the borrower). Whilst this tends to be a good form of borrowing, if neither you or your guarantor are unable to repay the loan then there could be serious implications.

In spite of the obvious advantages and disadvantages of each form of borrowing mentioned here, the main advantage is the positive affect they could have on your credit score if you repay them in a timely manner.

As a consumer you have a duty to protect your own interests and understanding the benefits of pitfalls of different types of lending is a significant step in the right direction.

To find out more about borrowing money and finding the right product for you, check out our other financial guides:

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