{"id":700,"date":"2024-05-24T11:28:08","date_gmt":"2024-05-24T11:28:08","guid":{"rendered":"https:\/\/www.drafty.co.uk\/blog\/?p=700"},"modified":"2024-05-24T11:28:10","modified_gmt":"2024-05-24T11:28:10","slug":"how-to-use-a-line-of-credit-responsibly","status":"publish","type":"post","link":"https:\/\/www.drafty.co.uk\/blog\/how-to-use-a-line-of-credit-responsibly\/","title":{"rendered":"How To Use a Line of Credit Responsibly"},"content":{"rendered":"\n<p>Looking for a short-term cash boost to tide you over through unexpected financial difficulty? You might start looking for a <strong><a href=\"https:\/\/www.drafty.co.uk\/credit-line\/\" target=\"_blank\" rel=\"noreferrer noopener\">line of credit<\/a><\/strong>. A line of credit allows you to borrow a certain amount of money over a set borrowing period.<\/p>\n\n\n\n<p>Here at Drafty, we like to think of a credit line as an alternative to an overdraft, credit card or loan. It&#8217;s like a pot of cash. You can reuse as much as you need, when you need it. If you&#8217;re not using it, you won&#8217;t have to pay a thing.<\/p>\n\n\n\n<p>Now you know the simple outline, so it\u2019s time to explore the nitty-gritty. This blog will explain more about a line of credit. Who can apply? How to apply? And how to use it safely and responsibly.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.drafty.co.uk\/blog\/how-to-use-a-line-of-credit-responsibly\/#what_does_a_line_of_credit_offer_that_a_payday_loan_doesnt\" >What Does a Line of Credit Offer That a Payday Loan Doesn\u2019t?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.drafty.co.uk\/blog\/how-to-use-a-line-of-credit-responsibly\/#what_can_i_use_a_line_of_credit_for\" >What Can I Use a Line of Credit for?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.drafty.co.uk\/blog\/how-to-use-a-line-of-credit-responsibly\/#how_to_take_out_a_line_of_credit\" >How to Take Out a Line of Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.drafty.co.uk\/blog\/how-to-use-a-line-of-credit-responsibly\/#how_does_a_line_of_credit_affect_your_credit_score\" >How Does a Line of Credit Affect Your Credit Score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.drafty.co.uk\/blog\/how-to-use-a-line-of-credit-responsibly\/#how_can_i_stay_safe_while_using_a_line_of_credit\" >How Can I Stay Safe While Using a Line of Credit?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_does_a_line_of_credit_offer_that_a_payday_loan_doesnt\"><\/span><strong>What Does a Line of Credit Offer That a Payday Loan Doesn\u2019t?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You might have found yourself exploring short-term borrowing options and then come across a payday loan. A line of credit and a payday loan offer different things. The main difference between a payday loan and a line of credit is the ability to reuse your credit line as much as you like without having to reapply each time.<\/p>\n\n\n\n<p>Quick payday loans often have extortionate interest rates attached to them, potentially leaving you in a difficult financial situation after your borrowing period is over. What\u2019s more, if you get entangled in instant payday loans with high-interest rates, you might land yourself in a dangerous borrowing cycle, affecting your financial stability in the long term.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_can_i_use_a_line_of_credit_for\"><\/span><strong>What Can I Use a Line of Credit for?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Similarly, to a payday loan, a line of credit is typically used for those unforeseen costs that catch you off-guard. For example, if your dishwasher needs replacing, your car tyre pops or your boiler breaks and you need some extra cash to cover the costs, a line of credit will help to ease the financial pressure. A line of credit should only be used as a cash boost, not as a long-term financial solution.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how_to_take_out_a_line_of_credit\"><\/span><strong>How to Take Out a Line of Credit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Of course, we can only speak from our experience, as every line of credit provider is different, but this is how we do things at Drafty.<\/p>\n\n\n\n<p>We realise that applying for a line of credit might feel overwhelming, which is why we\u2019ve streamlined our process, making it a piece of cake to\u00a0<a href=\"https:\/\/www.drafty.co.uk\/application\/apply\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>apply for a line of credit<\/strong><\/a>\u00a0at a Representative 96.2% APR (variable). You could get a Drafty <strong><a href=\"https:\/\/www.drafty.co.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\">payday loan<\/a><\/strong> alternative in just four easy steps:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Apply<\/strong>&nbsp;\u2013 You only need a few personal details to help us to get to know you better.<\/li>\n\n\n\n<li><strong>Set a credit limit<\/strong>&nbsp;\u2013 If you\u2019re approved, you\u2019ll be given a credit limit of up to \u00a33,000. You can then use as much or as little as you want, paying interest only on what you use.<\/li>\n\n\n\n<li><strong>Flexible payment<\/strong>&nbsp;\u2013 You\u2019re expected to repay a minimum amount every month. What\u2019s more, there\u2019s no charge for repaying early and it\u2019s easy to do so on our app.<\/li>\n\n\n\n<li><strong>Fast Cash transfer<\/strong>&nbsp;\u2013 Use Drafty whenever you need to. We\u2019ll send the money to your bank in under 90 seconds, if approved.<\/li>\n<\/ul>\n\n\n\n<p>Before settling on a line of credit direct lender, take a look at the process that they use and find the one that suits you and your financial situation the best.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how_does_a_line_of_credit_affect_your_credit_score\"><\/span><strong>How Does a Line of Credit Affect Your Credit Score?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The bottom line is that a line of credit will affect your credit score positively or negatively according to how you use it.<\/p>\n\n\n\n<p>Making a conscious effort to use your line of credit responsibly will protect your credit score and might even contribute to improving it. If you take out a line of credit as a financial boost, pay it back on time and don\u2019t make multiple applications \u2013 you might find that it has an encouraging impact on your credit score.<\/p>\n\n\n\n<p>On the other hand, abusing a line of credit will <strong><a href=\"https:\/\/www.drafty.co.uk\/blog\/credit-building-mistakes-to-avoid\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.drafty.co.uk\/blog\/credit-building-mistakes-to-avoid\/\" rel=\"noreferrer noopener\">damage your credit score<\/a><\/strong>. Making late repayments and filling out lots of applications will make you appear as an irresponsible borrower, which not only affects your credit score but also limits your chance of borrowing any form of credit in the future.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how_can_i_stay_safe_while_using_a_line_of_credit\"><\/span><strong>How Can I Stay Safe While Using a Line of Credit?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>While line of credit providers will do what they can to encourage safe borrowing, it\u2019s up to you to stay in control of your financial situation. There are three things that you can do to stay safe while using a line of credit:<\/p>\n\n\n\n<p><strong>Assess your finances<\/strong> \u2013 only make a line of credit application unless you\u2019re certain that you can pay it back, plus interest.<\/p>\n\n\n\n<p><strong>Monitor your credit score<\/strong> \u2013 your credit score is important as it determines your borrowing ability, so you must manage it through your borrowing period.<\/p>\n\n\n\n<p><strong>Keep an eye on your repayment dates<\/strong> \u2013 it\u2019s easy to get swept away with life and forget the important things. However, forgetting to repay your credit could be detrimental, so do what you can to keep on top of things.<\/p>\n\n\n\n<p>If you\u2019re looking for a cash boost to cover an unexpected cost, visit Drafty today and get a line of credit at Representative 96.2% APR (variable).<\/p>\n\n\n\n<p><strong>Disclaimer:<\/strong> We are not providing financial advice, these are just tips for informational purposes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Looking for a short-term cash boost to tide you over through unexpected financial difficulty? You might start looking for a line of credit. A line of credit allows you to borrow a certain amount of money over a set borrowing period. Here at Drafty, we like to think of a credit line as an alternative [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":755,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-700","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-research"},"_links":{"self":[{"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/posts\/700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/users\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=700"}],"version-history":[{"count":5,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/posts\/700\/revisions"}],"predecessor-version":[{"id":1156,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/posts\/700\/revisions\/1156"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/media\/755"}],"wp:attachment":[{"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.drafty.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}