How to Rebuild Bad Credit

Building credit is not an easy thing. If it’s something you have struggled with in the past, a personal loan with us could help jump start your path to a healthy credit score. Did you know 35% of your FICO score is built on your payment history?

Whether your credit started on a rocky path, or maybe you’re just starting out building, having a personal loan could help you improve it by making regular, on-time payments during each of your billings cycles. As you make on-time payments on a personal loan, you may see your credit score begin to improve. A better score may also help you qualify for other types of credit, like a home mortgage,

Getting a personal loan can be an effective way to improve your credit if you’re using it wisely. Making payments on time and holding off on multiple applications for credit can help boost your score too. Many lenders will perform a credit check when evaluating your application and having too many inquiries in a short period of time may negatively impact your score.

An NHCASH line of credit is a great option for those seeking to use a loan to help build or improve their credit. Not only will NHCASH report your payment history to major credit bureaus, but our lines of credit afford you with another credit-building opportunity that is not available with title loans or installment loans. Once you have your initial line of credit with us, eligible customers can receive additional credit limit increases, which may help you continue to boost your score. Credit limit increases can help improve your credit because they positively impact your credit utilization ratio. Make sure you check out our credit limit increase page to learn more!

To simplify it, the credit utilization ratio is the ratio of what you have actually borrowed, as compared to your credit limit, or the amount your lender will allow you to borrow. So, for example, if you borrowed $100 on your line of credit with a credit limit of $500, your credit utilization ratio is 20%. Most credit experts advise that you should try to keep your credit utilization below 30% as this indicates that you’re effectively budgeting within your available credit. As such, we encourage eligible customers to request credit limit increases when they are able, even if they don’t have an immediate need for a drawdown, because the credit limit increase can positively impact their credit utilization rate.

Another credit-related tip when it comes to your line of credit is to keep it open. You might think you should close your line of credit account once you have paid it down, but keeping it open may positively impact your credit. This is because closing your account can significantly impact your credit utilization ratio.

For example, let’s say you received an initial line of credit from us for $350. You’ve made on-time payments, have applied for and received several additional credit limit increases and cash drawdowns over the last few years and you now have a credit limit of $2,000 with NHCASH! By now, you’ve got your finances on the right track and you want to pay down your line of credit account to a $0.00 balance. When you do this, you will have the option of keeping the account open or closing the account. Now, as we mentioned – you may think that since you don’t want or need the account anymore you should close it – but closing the account takes your available credit limit out of the calculation of your credit utilization ratio. So, after paying your line down, your credit profile reflected the fact that you’ve borrowed $0.00 of $2,000 available to you – if you close the account, your credit profile will no longer show that you have access to available credit if needed, which may make your credit file look riskier to some lenders.

Not to mention, keeping your NHCASH account open and in good standing means you have access to additional cash when you need it.