This seems an awfully tough concept to get your head around at first, but getting a instant cash loan to consolidate the minor misgivings in your outgoings can actually help to repair a poor credit history.
Getting heavily into debt through lending too much money on credit cards, re-mortgages and secured or unsecured loans, up until the last few years, has been something you could do in your sleep. Literally.
When everyone had to try desperately hard to get a bad credit rating, the moment you got close to your overdraft or credit card limit, your bank would write to tell you they’d increased it to the next threshold. Furthermore, you would be inundated for weeks by junk mail from other credit card providers to take out another card with them, even switch your existing debt with 0% interest for up to a year to entice you to burden them with your debt.
Funny, the doormat doesn’t seem so bothered by those loan and credit card offers much these days. It’s not very often now you see loans – even on short-term or short term loans – from lenders offering 0% interest.
Interest charges build up, seen and unseen
Whether it’s your mortgage or your overdraft, those little misdemeanours can soon start eating into money that would equate to your disposable income if you’d kept within the limits. Once you get to the point of no return, you’re never going to improve your credit rating or get out of the cycle of debt without a little hand up. A payday or short-term loan can often be that lift you’ve been looking for; many of them are available regardless of credit history or even without credit checks.
If you’re constantly living to the edge of your overdraft or often foregoing one repayment in favour of another, willing to pay the £5.00/day interest that you’re short at the end of the month, you may not feel a massive dent in your monthly budget, but your credit rating is taking the hit month on month.
Families and households across the UK are strapped for cash, there’s no surprise in that statement. Every month, call centre staff hear the same old yarns as to why you can’t meet the full payment and, after they put the phone down after accepting your offer to repay the difference in installments, you notch up one small victory for yourself. In your mind’s eye, whilst bracing yourself for a few short months whilst you pay back the extra balance, you’re doing a little jig or punching the air.
But is it really a victory in the long term?
In the next article, I’ve got my own little story of debt, living on the edge (of my overdraft) and how short term loans make sense to tidy up your little shortcomings and may even pay for themselves, repairing your credit rating, as you go.