Bad Credit Rating Credit Cards
Millions of consumers with a bad credit rating were refused credit in 2010, research showed, as the high cost of living burdens many with debt.
The economic downturn has seen inflation rise and benefits reduced, while pay freezes and redundancies continue to be felt.
Moneysupermarket revealed almost 4.5 million Brits were refused credit last year, while those who have credit cards are unable to repay the debt they have racked up on it.
A study by Gocompare showed 22 percent will be struggling to pay back the debt they owe on their credit cards this year – a situation which will reduce their credit rating and make it harder for them to attain credit in the future.
How to Budget and Get Out of Debt
To rebuild your credit rating it is important you pay off your existing debts, and carefully budgeting your spending is a good way to achieve this.
Think about cutting down on luxuries such as expensive nights out at the weekend, or eating in restaurants regularly.
To retain a good social life, try and make alternative arrangements which are less costly, such as eating out when there are relevant vouchers you can put towards the price, or having a party at home instead of heading to a bar.
If you can keep within budget for every area of your spending, you should have some money left over at the end of the month to put towards paying off your debts.
Once debt free, it is also vital you continue to budget your money so the funds you borrow on a credit card can be paid off in full each month. This will boost your credit rating and make it easier in the future to attain credit.
A prepaid credit card is a good tool which aids budgeting for those with a bad credit history. It does not have an overdraft, so the user can only spend the amount they loaded onto the card, and anyone can attain a prepaid card irrespective of their credit history.