What is bad credit and how can you reverse it?

Your credit score is the number that lenders calculate, using information from your application form along with your credit report, to work out whether or not you will be a responsible borrower who is likely to repay what you owe them.

A bad credit score can really hurt your financial well-being – however, it is not set in stone. Your credit rating changes along with your financial behaviour so you can take steps yourself to improve your credit score.

One tip for reversing a bad credit score is staying well below your credit limit while borrowing – decide on the amount of money you want and stick to it. Don’t be tempted to borrow the maximum amount offered to you if you don’t need it.

Paying your credit cards on time and not falling behind on loan repayments will help you reverse a bad credit rating. Avoid charging things you can’t afford to your credit card or making minimum only payments on your bills and you will gradually see your credit score improving.

Once you have gotten your credit back on track, it’s important to keep it that way. Draw up a budget and stick to it. Be sensible with your borrowing and throw away those tempting invitations for credit you don’t need! Here at Valley Finance, we promote responsible borrowing.