As Christmas becomes a distant memory, some of you will be looking at your finances and wishing they could look a lot better. After the big-spending period that included all the food and gift buying, you may have turned to relying on your overdraft or credit cards to see you through between pay checks. This may have caused a strain on your current finances and left your credit rating looking less than healthy. With it reported last year that millions of people are only $400 from financial difficulty, many are experiencing relatively low financial health.
You’ve got a couple of options depending on your own circumstances; turn to your savings to help you get back on track, or take out a loan to alleviate the strain. But who will be willing to help with a poor or bad credit rating? What should you do next?
Find all Your Available Options
With so many lenders available, you can be forgiven for overlooking some of the bests deals available. It’s difficult to know where to start looking and to tell a good deal from the bad. Many people will go with a trusted and well-known source that they’ve used before, but what if this isn’t your best option? The only way you’re going to know is by finding all the best available options, but this is no easy task on your own. This is especially true when wanting loans for a fair credit rating where finding lenders to help can be less obvious. To make things much easier for you, comparison websites can do the searching for you and show you what’s available based on your requirements. This way you can review and choose much quicker than if manually web searching yourself.
Check Your Credit Score
If you know that your finances aren’t in the best way, you’ll probably need to check your credit score. This should always be something you look to do before applying for any borrowing, as you’ll be able to see what lenders can about your credit history. You may find it doesn’t make for as bad reading as you might think, hopefully showing a better score than expected. If it does show a fair or bad score, then you can start to look at what is causing this. Most credit reference agencies will be able to show your score for free, but for a more detailed report, you’ll need to pay a subscription or one-off fee to see it. This is worth considering as it will break down aspects of your credit history so that you can start planning how to improve it. If you spend time trying to improve your credit score, you’ll have a much better chance of being approved for a loan in future.
Review Your Finances
As well as your credit score, you should look to work out what you can afford to pay. If you apply for a loan without checking this, you could end up with a loan that you cannot afford to pay back. Fortunately, most lenders have checks in place to ensure you do not become overextended financially, but ultimately the responsibility lies with you to check. The easiest way to do so is by using an online affordability checker where you can enter your current income and monthly expenditure to see what you’re left with to spend. If it shows you have disposable income, then you can work out from that what you are willing to pay each month on a loan.
No Loan, No Problem
If having checked your current affordability you’re not left with much to spend, you may have decided to put any further lending on hold. There are still some ways you can help your situation, one of which includes cashback cards. These types of credit card reward you for your regular spend, for example, buying fuel or paying for train tickets. So, without taking out further lending, you could earn a small percentage of cashback every time you spend. You may already have a credit card that has this type of rewards program so you should check this with the lender. If you don’t have a cashback card, then even with fair or poor credit, you may still be able to apply for one with a low credit limit.
Focus on Savings
Your ultimate aim with your finances is to be able to start saving. Once you’ve planned out your current finances and what has to be paid each month, you may even have some money left over. Even if it is a very small amount, you should look to put this into a savings account. This way you can start to build savings, albeit slowly, and eventually have a good amount put away. This process can be made much quicker with the right savings account. You’ll find many lenders offering savings accounts with good rates of interest so that you can earn money each month. If you have reached this far, then there is no reason why 2020 can’t be a great year for your financial health.
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