It’s estimated that 16% of Americans have bad credit. That’s about 48 million people living with the financial limitations set by low credit scores. Bad credit can feel like a prison when you have trouble finding rental options, encounter higher insurance costs, or when it keeps you from the job you’re pursuing. People find themselves with poor credit health for many different reasons, but the most common is due to multiple, maxed-out credit cards that are seemingly impossible to pay off. The truth is that credit scores can be healed; you just have to look for help in the right place. Lendah is one of the top direct lenders for bad credit personal loans and can find the loan and resources you need to improve your credit health.
How Credit Cards Affect Your Credit
Believe it or not, credit cards are not always the enemy when it comes to your credit score. The danger comes when we get in over our heads with multiple monthly payments and interest charges that keep us from paying down our balances. Here are some of the positive and negative ways credit cards can impact your credit.
Positives of Credit Cards
- They are a great way to establish credit
- They can increase your credit mix
- They add to your total credit limit, which can help lower your credit utilization rate.
Negatives of Credit Cards
- They have high-interest rates
- It’s easy to drive up high balances that are more difficult to pay off.
- They can easily damage your credit if not managed well.
We understand that sometimes, racking up credit card debt is the only option when you’re in a financial bind. This, unfortunately, can have a negative impact on your credit. However, you have solutions for improving your credit score.
How to Improve Your Credit Score
Improving your credit score takes time, patience, and dedication. It’s not an easy road, but there is help and support along the way for those who ask for it. Here are some of our top tips for improving your credit score:
Pay Your Bills On Time
One of the best things you can do to help your credit score is to pay your debts on time and in full whenever possible. Payment history makes up a significant chunk of your credit score, so it’s important to avoid late payments. This might seem a simple enough task, but when your budget is tight, it can be difficult to make the date each month. If you can, set up automatic payments to ensure you’re making the payments on time each month. If this doesn’t work for you, assess the payment date. Many credit card companies are willing to change the date of your payment if it works better with your paychecks.
Keep Your Credit Utilization Rate Low
If you can’t pay off your card each month, try to keep your credit utilization rate under 30% across your credit card accounts. Maxing out your credit cards not only hurts your credit utilization but can make keeping up with your monthly payments difficult – especially with high-interest accounts.
Leave Old Accounts Open
Paying off and closing your accounts can have the opposite effect than you anticipated. By keeping your accounts open and at a zero balance, you can add to the length of your credit history. If you close them down as soon as you’ve paid them off, it can negatively impact your credit score.
Monitor Your Credit
We may not enjoy looking at our credit scores, but it’s important to keep an eye on your credit reports. You can review your account from nationwide consumer reporting agencies for free. Keep an eye out for inaccuracies or signs of identity theft and fraud, and check to see if you have any unpaid balances or accounts that have gone into collections.
Personal Loan for Bad Credit
A personal loan for bad credit is the single best way to improve your credit score and take control of your debt. With a debt consolidation loan, you can decrease the number of payments you make each month, pay off your credit card debt with a fixed monthly rate, and improve your credit health.
Lendah: Direct Lenders for Bad Credit Personal Loans
Lendah is your best option for finding a lender that meets your needs and budget. We’re like the matchmaker for lenders. Because we work with a network of over 30 lenders, we can match you with a lender that works specifically with lower credit scores. These loans work to improve your credit by making it easier for you to make every payment deadline and pay off your high-interest credit card debts. You can save time, money, and your financial health with a bad credit personal loan from Lendah.
Learn more about Lendah’s loans for bad credit.