What do I do if I have a bad credit history?
If you have a bad credit history due to managing your finances, what you should do immediately is improve it. Having a bad score on your bureau decreases the chances of getting approved for new credits, for example, one for business.
The importance of the history lies in the fact that the institutions that offer loans evaluate it to know your level of indebtedness and how punctual you are in your payments. If they see that you have a bad performance, they will reject your request, since you present a risk of not being able to pay it.
If you perform the following actions, your history may improve:
Settle your due debts
Maybe what has brought you to read this post is that you have multiple debts and do not know how to liquidate them. A good strategy to follow is to make a list of each one and evaluate them in the following way:
Adjust them by amount from highest to lowest, also note the interest they are charging you and so you will know in which to go gradually allocating a certain amount of money to settle it. We recommend you start with the one that generates the highest interest.
It is very important to be careful of your level of debt, since you can reach an over-indebtedness thanks to the amounts you owe plus the interest generated.
Pay on time
It may be very difficult for you to pay your credits on time, either because you forget the cutoff date or you do not really have the liquidity. But still, you can apply small strategies that will make the change.
Set both your income and monthly expenses. From these, review what expenses you can reduce to raise the budget you allocate to the payment of your debts.
It is also good to have digital tools that help you monitor your credit history. In Konfío we develop Kompás, it is totally free and through this app you can review your history in real time and as many times as you want.
Reduce the use of credit cards
It is true that the constant use of your cards increases the information you can provide with your credit history. But remember that the more you use them, the greater the debt you will have. Limit its use for things you really need.
Also having more than 5 different cards can hurt you, because you must first learn to use them intelligently. For example, many entrepreneurs use their personal loans to finance their business, which is not correct.
Now that you have these tips, you can improve your credit history. Learn how to properly use the credits to which you have access and reduce debts. This way you will have control over your finances and favor your opportunities.