If you have a poor credit rating then you might want to do different things to try to improve it If you want a loan, perhaps a mortgage, then your credit rating will be taken into consideration and it could be reducing your chances of getting accepted for one. Your credit rating is also used when looking for rental accommodation and you may have less choice if you have a poor credit rating. Some people even have a poor credit rating because they have never borrowed money, paid bills or rented and so there is no way of knowing whether they are reliable with regards to making regular payments. It can therefore be tempting to try different things to improve the rating.
It is worth noting that there are lots of options for improving your credit rating and so you should consider all of them and not just one. You should make sure that your credit report is correct to start with. Get your name put on bills that are regularly paid in your household and make sure that they continue to be paid, for example. Having a permanent job and a good salary will be a factor as well so if you are not working or are self-employed then you could find that make sit lower. If you have any unpaid debts then paying those back will also make a big difference.
Some people think that if they take out a loan and then repay it, it will show that they are capable of making repayments and therefore improve their credit rating. There is some sense in this as it can prove that you can cope with borrowing money, however with a low credit rating it could be difficult for you to be able to get that loan in the first place. If you do manage to get the loan then there could be a few problems with it.
Firstly, with a low credit rating you could find that the loan will be really expensive. Even if you were to use firms such as Emu No Credit Check Loans, you have to decide whether you think that it is worth paying that money just to improve your credit rating. There may not even be any guarantee that it will actually work and so you could be paying out that money for nothing. It is wise to calculate how much the loan will cost and then you can think about whether you think that it is worth it or not.
There is also a risk of taking out a loan. As with any type of borrowing you will need to repay it. Some loans have a repayment schedule that you will need to stick to and others allow more flexibility and you can pay back when you can, usually with a minimum repayment amount to be paid regularly. Whichever type of loan you choose, you will need to think about how you will repay it. You will need to find the money each month to make the repayments or find a lump sum to repay it. It is wise to consider how you will manage to do this. It could be that you have enough spare money each month to afford it or you think that you will use the money that you have borrowed to make the repayments. You need to remember that what you repay will not just be what you borrow but the interest and any other costs on top, so you will need to allow extra money. It could be worth calculating how much this will be and also consider how much this might rise by if the interest rate goes up, which it will do if it is a variable rate and the base rate increases. If this does happen, consider how much that increase might be and whether that will be an amount that you will be able to still afford.
So although getting a loan could seem to be a good way to improve your credit report it may not work out that way. There is no guarantee that it will work and it is a risk. You will have to find the money to repay it and if you do have difficulty with this you could actually end up with a worse credit record than you had before. It will also cost you money and you will have to decide whether you think that it is worth that expense.