How to deal with bad credit when you're on a budget

Having bad credit can make it difficult to get approved for loans, credit cards, and even apartments. You need a personal lending options in case of emergency and other needs. In times like this, especially inflation, you need options to survive.

Been on a budget before the pandemic hits. As a freelancer, you need a fallback in every projects that I’m doing. Living in the third world country, perseverance that you need to strive hard. I seldom applying for loans, fear of slumping in debts. There are times that it’s tempting to have a credit card of my own, but rather to save money using other bank accounts.

Some people says that it’s hard to save money. In order for you to save up is to stop splurging in expensive stuff.

If you’re on a budget and dealing with bad credit, here are some tips that can help you improve your credit score and manage your finances:

Create a budget: Start by creating a budget to track your expenses and income. This will help you identify areas where you can cut back on spending and allocate more funds toward paying off debt. You can put your weekly budget in a note app which you can check it down every time.
Prioritize debt repayment: Make a list of all your debts and prioritize them based on interest rates and payment due dates. Focus on paying off high-interest debts first, and make minimum payments on the rest.
Consider a debt consolidation loan: If you have multiple high-interest debts, you might consider consolidating them into a single, lower-interest loan. This can make your monthly payments more manageable and help you pay off your debt faster.
Use secured credit cards: Secured credit cards require a security deposit, but they can help you build credit if used responsibly. Make small purchases and pay off the balance in full each month to avoid interest charges.
Avoid new credit applications: Every time you apply for credit, it can have a negative impact on your credit score. Avoid applying for new credit cards or loans until you have improved your credit score.
Check your credit report: Review your credit report regularly to make sure there are no errors or inaccuracies that could be hurting your credit score. You can request a free copy of your credit report once a year from each of the three major credit bureaus.
Seek professional help: If you’re struggling to manage your debt, consider seeking help from a credit counselor or financial advisor. They can provide guidance on budgeting, debt repayment, and credit repair.
Manage extra funds for emergencies and other needs: Whether you’re receiving high salary or not, you need to set aside funds in order for you to prepare in case of emergencies. There are some institutions who lends money for emergencies but you don’t have to rely from them. Also, you need an insurance that can help in your hospitalization.