A bad credit rating is not something that anybody wants, but sadly sometimes it is a thing that happens.
For whatever reason it occurs, being flagged as uncreditworthy is not a situation that you want to be in, but similarly, it is not the end of the world. So, if you do end up blacklisted you need to do whatever you can to ensure that you redeem yourself and get a record re-established as quickly as possible.
At first it might seem like an impossibility, a real struggle, and you might not have an idea of where to start. But calm yourself, take a deep breath and read our quick guide to seeing your way through the situation and onwards to something better.
It is not the end of the world
Ending up with a bad credit rating is not the end of the world. Sure, it might be harder to get financing or to open an account, but it is not insurmountable. Remind yourself that you are not the first person to end up in this position.
Then make sure that you go about ensuring that next time a cash crunch hits that you have access to the finance you need.
Go online and search for something like ‘bad credit loans Australia’; you will be amazed at the options that present themselves – the reality is that there is an entire industry geared towards helping people in your situation.
Part of not getting into debt or developing a bad credit rating is planning. You should only be spending the money that you have, and, even then, not all of it. And to do this properly you need to plan your spending. That is where creating budgets comes in. It might sound over the top, but it is essential. You absolutely cannot rely on gut feel and intuition to decide how you are going to spend your cash. If that is what it boils down to then you are heading for some serious trouble.
One of the reasons people end up in debt is because they don’t save. But a failure to save means that you end up living from hand to mouth and that is almost always bound to end in disaster. As a very basic guideline you should be saving a minimum of ten percent of what you earn. And when we say saving we are not talking about things like pensions, we are talking about short-term savings that can be drawn on in emergencies. Perhaps they are better described as contingency funds – it is cash that you can access in the event of an emergency or an unplanned expense.
Don’t spend what you don’t have
So often the temptation is there to buy items that you can’t afford. Higher purchase and store credit arrangements make it very easy to walk in and buy goods that you will pay for in the future.
What that inevitably means however is that you end up paying a whole lot more for the item than you would have paid if you had ready cash. It is also the way that most people with bad credit ratings end up in that position.
So be circumspect, rather save for the item that you want, delay the gratification, pay for it in cash and live debt free.