Bad Credit and What It Can Mean to You
Aug 3, 2009 Credit Counseling
Everyone wants to avoid a bad credit rating, it’s not something we should aim for. Bad credit involves common practices that can damage your credit rating and this can involve not being on time with payments, skipping payments, exceeding card limits or declaring bankruptcy of any type. If you are somebody on this side, you are considered as “high-risk” for credit lenders and let’s not sugar coat everything, you will definitely have a hard time applying for a loan or any credit card and even bank account.
How will the bank know that you have a bad credit? When you fill out an application for a loan or credit car, your information will be forwarded to the credit bureau so they can match your name, address and other things identifiable to you to the information the bureau has in its files. Your credit rating or score is determined by your payment history (delayed payments for more than 30 days will have a significant impact to your score), how you control your debt (if you live beyond your means), re-aging, signs of responsibility and stability (how long you have been in your home or job), soft and hard inquiries and unused credit cards.
If you have a bad credit, it’s not the end of the world. There are still some things that you can do to repair your credit. There are companies out there who are willing to help you restore or clean up your poor ratings. However, it is your sole responsibility not to fall into any scam because it might worsen your credit score or you may end up having more debts. Before you take a dive, make sure you’ve done your research. Have you ever heard about the bad credit repair law? It bestows legal rights that will involve your credit history and what it shows to lending companies which means you can dispute items on your credit report if you feel that they shouldn’t be there or if it is totally unfair on your part. What are the things you can dispute? You can look at any inaccurate information, incomplete information and unverifiable debts. This will be under investigation and if proven false, it should be removed within 30 days.
Tags: Credit Counseling
