3 Steps to Fixing Bad Credit - Insane Visions

3 Steps to Fixing Bad Credit

A credit report is a comprehensive breakdown of a person’s credit history which is prepared by a credit bureau agency. A credit report is vital information that shows you the complete credit history of a business or individual. It is an important collection of detailed information for both business, banks and creditors to ascertain whether they should grant someone a loan and to what extent.

Every customer knows the importance of a credit report. In fact, obtaining credit is a privilege one should earn. If you’re offering services to your customers before taking any form of payment, essentially, you are a business extending a credit transaction with them. If you find yourself with bad credit and want to enhance it for the future, here are some ways that may help you in carrying out a good credit history.

1. Get Your Credit Report And Assess It

Many people are not aware of the current state of their credit situation. In making sure that you are not harming your business, securing a copy of your business’ credit history is a must. Monitoring, assessing and understanding your credit situation will help you in order for you to make a sound financial decision.

Assessing your credit report will not only let you make a reasonable decision for your business, but it will help you avoid lending money to those who cannot pay it back. Mistakes are part of running a business and it is important to spot them early on so you can rectify them as soon as possible.

2. Arrange A Single Debt Consolidation Loan

Managing multiple debts with different interest rates and payment dues may become a demanding obligation. Chances are, this may result in missed payments and/ or further debts if action is not properly taken to rectify these risks.

For cases like these, consolidating your loans into a single debt is the most viable option you can do to keep track of your loan agreements. You will not only be subjected to the same interest rates (for most cases), but you will also save yourself some time and stress from tracking on other debt agreements you have with other parties.

In signing a single debt consolidation loan agreement, some of the important factors you may want to consider include interest rates, loan term, and if there’s any applicable charges or fees. Hence, before entering into a contract, make sure that you have done your research on these matters.

3. Use Direct Debits To Pay Your Bills

Ensuring that you are at the top of your business affairs is important and one way of doing that is by paying your bills on time. Direct debit is a great way to make sure that your bills are being paid on time. This method provides you peace of mind, allowing you to manage your business stress-free.

The method also gives you an opportunity to design your direct debits by spreading your costs over the month. This is applicable for both businesses and individuals alike, as credit card payments and/ or direct debit may reduce the burden of remembering the outstanding bills or invoices, securing timely payment. It is also a good indication that you can consistently pay a certain amount on a fixed date — which banks and lenders can use as a consideration for your future loan application.

Takeaways

Keeping a well-maintained system in conducting your business is the key to making sure that you are doing the bare minimum requirement as a business owner. Checking your credit report regularly is part of maintaining such a system. This allows you several benefits — both financial and nonfinancial benefits.

As a business owner, it is imperative that you only make transactions with an honest customer and requesting one’s credit history report should be one of your requirements. Remember, reducing all the apparent risks should be your top priority before entering into a contract.

If you are a business owner and you want to ensure that you have a solid debt collection system in place, consulting with a credit control agency, such as JMA Credit Control, may aid you with the assistance you need. Do not let your business suffer the burden of unpaid invoices and start by doing the proper research of your potential clients.

Andrei

A finance and tech news journalist with a passion for entrepreneurship and business. Feel free to message me on Twitter and Facebook.