Credit rating refers to an individual’s ability to pay back debt and is calculated from his/her past financial dealings. The rating enables a creditor to quickly evaluate a business or individual’s credit-worthiness and make decisions on extending loans. The credit rating is expressed as a number called ‘credit score’. This score is calculated by Experian and Equifax, the two credit reference agencies in the UK. Anybody can check their credit score from either of these two credit reference agencies.
Irregular or non-payment of bills or debt can jeopardise an individual’s credit rating and affect their credit score. Every time you miss a bill payment deadline or fail to pay your credit card, home or car loan debt, your credit score decreases. This makes it more difficult to get a loan in the future. Individuals and businesses with poor credit rating also have to pay higher interest rates on loans.
How to Improve Credit Rating
Credit is one of the great ‘enablers’ of modern life. It enables people to purchase items they might not be able to pay for out of their pocket, take out loans for expanding a business, or pay for a college degree. Understandably, improving credit rating can have a dramatic impact on your quality of life. It can enable you to pay for a degree, a car, a home or even a pair of shoes at lower interest rates.
Knowing how to improve your credit rating is a matter of taking responsible financial decisions. If you don’t have a top credit rating the easiest way to improve credit rating is to take out money on a bad credit, credit card and pay off all accrued debt on time. Experian and Equifax monitor all financial transactions and your credit rating is more likely to improve over time if you make regular payments on your credit card debt. It is a slow process that can take months and even years, but it is the best solution to a financially healthy life.
Credit cards for bad credit like aquacard are designed for people with poor credit ratings. Debtors who have been rejected by other credit card providers have a higher likelihood of getting approved here. Aquacard offers multiple solutions for people who want to effect a change in their financial condition with APRs starting at low as 32.9%. Such cards are perfect for self-employed workers and freelancers who cannot show regular income, individuals who’ve had County Court Judgements (CCJ) for debt, and for low-income individuals like homemakers and retirees. Students who want to build their credit history can also benefit greatly from an aqua credit card.
Besides borrowing money on bad credit, credit cards, paying all outstanding bills on time will also help improve your credit rating and lead to a better financial life in the long term.