Avoiding Bad Credit: Is It Possible?
Indeed, today, life is ruled by financial transactions. These transactions render a person fit or unfit to be given "good credit". A credit score is the number that an individual ranks according to the three reporting credit score agencies.
Usually, a credit report from these agencies will show inconsistencies on your credit record - sometimes these may or may not be errors. So for borrowers, it is very important to compare all three reports so you can complain if there are errors existing in your credit score history and if there are issues that you wish to contest, you can fix these issues quickly.
In avoiding being classified as having "bad credit", the common and most effective solution is to pay your creditors on time. Also, pay your bills in full to effectively settle all your debts as they fall due. As much as possible, do not wait for the grace period to pay your bills. In case of late payment, continue paying your obligation until completely paid. Note, however, that your creditor may limit your credit or close your account if your payments persist to be late.
While there are no guarantees that anyone can avoid a bad credit due to many unforeseen circumstances. Cases of unemployment, sudden sickness, the inability to work for a period of time, or being a victim of credit card fraud or identity theft can severely impact your credit score.
Here are some ways to keep your credit rating at its best:
Create a budget to accurately determine how much income you are bringing in, define your monthly expenses, and establish your required savings.
According to financial experts, the best way to avoid bad credit is to catch it early on: change your spendthrift ways and improve your financial position. It sounds simple right? But it is not really easy as it requires discipline and a firm resolve to save more money and control one's spending.
Go directly to the creditors
If you are unemployed or a victim of an injury or illness, call your creditors and inform them about your situation. They may welcome any concern and in this way, you can get their trust and maintain a good relationship with them. Moreover, they may allow you to stop payments for a few months and even let you create a payment plan that requires much less than the minimum for a few months while you work out your financial situation.
Live with a budget
If you hate getting a bad credit score, set your mind on prevention! If you are unemployed or have fallen ill, the best way to avoid bad credit is to be a responsible borrower in holding a credit card. As a matter of fact, you don't need more than two or three credit cards. Before being tempted to get another credit card, consider your financial position. Can you afford it? Is it a need or a want? Be aware of your current and future financial needs and stick to your monthly budget.
Indeed, sound financial decisions, consistency in paying your monthly obligations on time and observing a strict monthly budget will get you on the road to have a strong credit history. Even if you have a bad credit rating, it is never too late to reverse your score. Striving to get a good financial score is like giving yourself a "clean bill of health" ?you will reap its benefits sooner or later. For more help on not just improving your poor to bad credit scores, but also being approved for an affordable automotive loan then contact our finance department. Our professional staff will help you come to terms with your credit score, and help you find a way to get into a vehicle quickly.