What You Need to Know About Poor Credit

Disadvantages of Having a Poor Credit Score

Credit cards have been known to confuse many people, as most individuals when maxing out their credits cards never consider the after effects. It took me some time to learn of the after effects of maxing out my credit cards. Like most people, I wasn’t aware of the fact that the level of your debt and how I made my payments affected my credit scores. It was a lesson I learned that hard way. For new credit owners, below are some of the disadvantages you will encounter if you happen to be as naïve and careless as I was.

The first thing that bad credit might affect is your employment opportunities. This might come as a shock to many, but its best to be aware that some top jobs are very strict. Most top jobs require you to have a good credit history which means that with a bad credit score, one can lose that opportunity of getting the job of his dreams.

Next, if you wish to start your own business, it could be more difficult. Unless you already have a stable income, starting your own business will require a bank loan that will be hard to attain with a bad credit score. This means that you have to be very careful with the way you carry out your payments.

Lastly, it will be hard for you to get an apartment. I bet most of you didn’t know that landlords check on a new client’s credit history before leasing them their property. A bad credit history will make your new landlord deny you a chance to live in that new apartment that you have always admired.

Recovering From Bad Credit

How many credit cards have you opened over the last few years? How do your debts compare to your credit limit? Are punctual when it comes to paying your bills? For how long and how often do you use credit? All these are some of the critical questions that lenders of cash loans like banks go through in order to record your credit score and see how good or bad you perform. Now in order to get a good score and have the bank help you out in your financial crisis you will need to ensure that you score really well here but what if your credit history is bad? We know you surely can’t run away from your bad credit history but it is important you know that it is indeed possible to turn around things and create a good name for your history. That is why through this article we will tell you how exactly you can be able to clear your bad credit history and make life easy for yourself when you want the assistance of lenders such as FinancialLitNow. They are certainly one of the most reputable companies and offer Loans for Bad Credit to people suffering from negative credit. You should realize what your current credit report shows and always monitor it to avoid any discrepancies.

First and most importantly you will need to obtain your credit report. This report will help you know what your credits are and how they vary showing the highest to lowest. You will now be able to go through it thoroughly and know if at all it contains any errors. If it does contain errors you get in touch with the credit bureau and have the errors corrected right away. There have always been disputes about incorrect figures on credit reports and if you do not notice and fix them then you can be sure that they will ruin your credit history even though you do not deserve it.

Secondly is making sure that you set reminders of all the payments that you are supposed to make. Sometimes people do not pay their bills in time and this not because they do not have the money but it is simply because they could have forgotten to make the payment in time. Although it is a silly excuse, the credit score will be affected by this and therefore it is in your best interests to have reminders that can help you avoid these kind of mistakes.

You will also have to reduce the number of people that you owe. This is one of the most challenging tasks but this will go a great deal towards ensuring that you credit history becomes good and very satisfying. You can go through your credit report get the people that you owe and then try as much as possible and pay them to keep the number of people you owe as low as possible and you will see how well this will help you keep a good history.

The other factor that helps keep clean your credit record is ensuring that you do not get many credit cards within a short period of time. When lenders see that you apply for many cards within a really short period of time they are very likely to get the impression that you are normally desperate and hence they will have fears trusting you with their money. To avoid credit cards, take time to research the many other financial resources. There are a few highly recommended websites that specialize bad credit lending for people with credit problems; you can go to FinancialLitNow  http://www.financiallitnow.org/cash-loans.html for more insight on cash loans for poor credit.

With the above tips you are now able to see that removing bad credit history is not so much a hard task, just follow the tips and be patient because it usually takes time but after some time you can be assured that you will be very impressed by how good things will turn around for you.

Things That Can Hurt Your Credit

Most everyone knows that credit scores have a big impact on one’s financial life. If you want to buy a home, take a credit card or a loan, banks will use it to make decisions. The interest rate you will be charged for such a loan is also dependent on it. Even the car insurance providers will consider the personal credit score when deciding about the insurance rate. So, we will explore some of the biggest things that can impact your score.

– Paying Late
It is the biggest contributing factor to credit score (even thirty-five percent). If you fail to establish a good payment history, it will be the worst thing you can do. No banks want to give a credit to someone who doesn’t pay his bills on time and in full.

– Maxing Out Credit Cards
If your existing credit cards carry very high balances and also if they are charged up almost to the limit than your score can take a hit. If it is possible, keep credit card balances up to 30% of their limits.

– Cosigning for Someone Who Does Not Pay
If you take legal responsibility for the debt and the borrower defaults for some reason, the bank will come after you for his debt. It can put you in a position that you are creditworthy at the moment.

– Defaulting On a Loan
Loan defaults would show that you have not fulfilled the end of your loan contract. It will make much harder to get approved again for some loan.

– Avoiding Loans and Credit Cards
A person cannot build a good credit score and credit history if he doesn’t use any credit. There will not be enough information in your past that can generate a high credit score. It will be the best if you use a many of credit products for high credit score (like student loans, car loans, mortgages, credit cards, some bank loans and so on).

– Applying for Multiple Credit Cards
If you apply for many credit cards or new loans it will indicate a higher risk. It shows that someone tries to avoid default on any credit obligations and make the risk and also the interest rate higher.
http://www.consumer.ftc.gov/articles/0145-settling-credit-card-debt

Preventing Future Credit Problems

For many people, credit can become a bad inconvenience. It can lead to losses in an investment or cause a decline in profits when being paid. To prevent future credit problems, one has to lay down ways to avoid being trapped in a debt.

First, create a budget. Make a budget that meets your needs and fits your income. Check on your spending patterns for the recent couple of months and your income. If they don’t balance, make appropriate changes where required so that you spend only what your income bracket can comfortably afford.

Secondly, pay your debts. Beware of what you owe because bad debts can be very costly. Make sure your credit card arrears are paid in full and never pay a little amount and remain with some debt. Pay the credit card balance in full and plan for future spending to avoid unnecessary credit card purchases.

Don’t buy on impulse. When you go out to the market and purchase an item that is not on budget, it will cause an imbalance on you. This might strain your savings as you will be required to cut the extra money from your account leading to a loss.

Never loan out money you are not fully assured of being paid by the debtor. This might make you fail to accomplish the maximum profit. When an opportunity of investing on a venture that guarantees double profits misses you, the loss can’t be recovered.

Lastly, avoid eating out on your credit card and pay affordable house rent. This ensures the extra money you get, by minimizing on your spending, goes to your savings. Having credit problems will make you not prosper. Take necessary precautions to prevent any future credit problems.