How To Live With A Bad Credit Score

There are a number of reasons why people have bad credit scores. From missing credit card payments to defaulting on loans — it’s not all fun and games, that’s for sure. Getting a personal loan or line of credit may be difficult or impossible when this happens. And this is just one of the many disadvantages of bad credit.

If you are thinking of filing for bankruptcy so some of your outstanding debts can be forgiven, please be warned that this can severely impact your credit score for quite some time. Depending on the type, the open bankruptcy duration could last from 60 days up to seven years, with credit points deduction usually ranging from 130 up to 240 (ouch!).

So what should you do? Don’t panic! It’s not the end of the world for you. Living a comfortable life is still possible, even with a poor credit rating. Here are some tips on how to live with a bad credit score.

Secure A Good Source Of Income

If you have a bad credit score, the best way to start improving it is by finding a stable source of income.

It’s important to be honest about your bad credit history when applying for a job. Even though some companies might run a credit check, do not be intimidated. A 2012 survey by The Society for Human Resource Management stated that 80% of HR professionals would still hire applicants even if they have a poor FICO score.

Also, if you have marketable skills, consider starting a side hustle. You can look for free online business opportunities like YouTube vlogging, affiliate marketing, freelancing, or selling things on Craigslist or eBay to bring in some extra money while working on a job during the day.

If the options above are not applicable to you due to a lack of knowledge or experience (and sometimes both), save up what you can and start a small business. Whether it’s selling hotdog sandwiches or lemonades, it’s better than not having a source of income. Start small and grow from there!

Use Cash Or Debit Cards

You can survive with a bad credit score using cash or debit cards instead of credit cards. This will help you avoid paying interest and penalties associated with late payments. Pay for things upfront, and only buy something if you can afford it. Don’t worry about missing out on special offers on credit cards. It’s better for your long-term financial health anyway!

Additionally, prioritize necessity over luxury when you have a bad credit rating. Do not buy things you do not need and set aside some money monthly so you can build up your savings for emergencies.

Seek A Private Landlord

When talking about your credit history, be honest and upfront about it. Don’t hide or lie about your situation just because you’re worried about what the landlord might think or say — you want to be truthful to someone willing to work with you. It can be challenging to find a landlord willing to take you in despite your bad credit score, but you will surely find one out there who is understanding of your situation if you’re patience enough.

Avoid renting from property management companies. They have higher fees and offer less flexibility than individual owners when dealing with late rent payments or understanding unfortunate circumstances, such as losing a job unexpectedly.

Take Public Transportation

Utilize public transportation while your credit reports are still on the negative side. It’s a great way to save money and stay healthy. Walking to the train station or bus station is a great exercise!

But if you really need to drive somewhere, you can ask a family member or a friend if you can borrow their car. Another option is to rent a car, but only do this when you are unable to borrow and it’s absolutely necessary.

Borrow Money From Loved Ones

If you’re strapped for cash and your credit score is low, it’s okay to turn to family and friends. It can be embarrassing to ask the people in your life for financial help, but it’s better than not being able to eat properly or keep the lights on.

If anyone does agree to lend a hand, don’t forget about repaying them. While family members and friends can be very understanding of your circumstances, it’s not good to just keep borrowing without returning what you owe them. Also, only borrow what you can afford to pay, so you don’t find yourself too deep in debt when you already have a bad credit score.

There Is Still Hope

You should be fine and still make your life comfortable even with a poor credit score if you keep these tips in mind. Start building your credit score again when it gets financially better for you. But this time, avoid defaulting on your loans, pay your bills on time, be mindful of your credit limit, and monitor your spending habits regularly.

And when the time comes that you’re ready to buy a car, get in touch with us at Lithia Hyundai Reno in Nevada, and we can get you one that’s right for your budget. You can also contact us at (775) 376-5049.