Struggling with debt can have a serious effect on your mental well-being and can lead to a build-up of stress and other complications. You may not think it, but a credit score can have the same impact. Not only does it give an indication of how you manage your money and affects the ability to have access to finances, but can be a devastating blow to your self-esteem.
As we are a society that relies on numbers to give us a sense of worth, a bad credit score can lead to people feeling they are “stupid” or less than others.
If you have had a low credit score, it can make you feel unworthy and can hold you back from improving the situation by making you feel as though conclusions have been made about you as a person. People believe that it will affect your reputation, when all it can do is just influence a lender’s decision to provide you with a loan.
Most lenders will overlook a credit score and decide to give you one; however, this does not mean you should not consider your credit rating.
The key to improving not only your self-esteem, but also your credit rating, is to understand what it is that has had a negative impact on your score. Once you have understood this, it can help you determine the best course of action that will lead to improved chances of acquiring credit as well as your own confidence. How can I distance myself from it?
A tactic to help you re-build your own confidence after receiving a negative rating is to try and “divorce” yourself from the idea that your score has a reflection on you as a person. This is easily said than done, but you should remember that a score can be improved effectively through small steps.
Another thing you need to remember is that your credit score is just a number and as mentioned above, can be remedied, but your confidence cannot be so easily fixed.
You can start by avoiding making too many applications for loans or cards. These will be noted down on your credit report, which lenders can see. They will interpret this as you being desperate for credit for any number of reasons, and decide that you are unable to manage debt. This will be a strike against you. Speak to a financial advisor about how to manage your debt. Doing so will start to improve your rating and also help with rebuilding your confidence.
Use a free credit report to understand why you were declined as this will give you an idea of how to bounce back from a low score. Just as a credit score can help, constantly looking at it will make you feel worse, so avoid being obsessed withthat. Analyse where you may have gone wrong and use that as a starting point for motivation. As the saying goes, once you hit rock bottom, the only way is up.
By Harry Price
Harry Price is a multi talented young man. He plays bass guitar for a local band, football for a village team and speaks several languages.