oscarnominations2017.com Announces How to Build Good Credit Habits when Coping with Poor or No Credit
SB Wire-When consumers find out they have bad credit scores, it could make them feel shortness of breath, anxiety, and headaches, but unlike pharmaceutical companies, credit bureaus don’t include a small print as a warning to consumers!
All joking aside, the personal finance editors at oscarnominations2017.com have provided a remedy for those dealing with poor credit scores, and although it might take time, there are several ways that consumers can improve their credit scores. The following tips can help people who are feeling the heartburn that bad credit score can induce form important financial habits.
No Credit Score Doesn’t Mean Good Credit Score
Contrary to popular belief, it can be just as bad to have no credit history as it is to have a poor credit score. Consumers with no credit might not be considered as risky as consumers with very bad credit, but they still might be in the doghouse when it comes to getting loans approved.
When lenders are considering loan applicants, they try to determine how likely the borrower is to pay it back. When a consumer has no credit history, lenders don’t have any way of judging the consumer’s financial responsibility, so they may be less likely to give a loan, or they’ll provide a loan with a higher interest rate to accommodate the potential risk factor.
No matter how terrible one’s credit score is, it’s always possible to rebuild the score, and consumers can improve their credit scores in many ways. For example, opening up a bad credit credit card, and using it responsibly, is an important first step to building credit. This doesn’t mean opening a credit card and not using it at all, or charging every purchase though. Don’t be afraid to use the credit card, just make sure to pay the bills on time.
Unpaid Bills Equal Credit Issues
Paying bills on time is extremely important when trying to form good credit habits. Consumers can form bad credit scores by not paying bills, even bills such as parking tickets and utility bills. Though there are other reasons for a bad credit score, unpaid or frequently late payments can show up on credit reports and lower a consumer’s overall score.
Keeping tabs on those kinds of bills is necessary when forming habits that will keep consumers out of trouble later. Breaking the habit of late and unpaid bills can seem difficult, but it is crucial when trying to strengthen a credit score.
Only Borrow When Necessary
Along the same topic as necessity, taking out a loan when it isn’t needed can cause critical damage to a credit score if it isn’t paid back on time. Apply for a cash advance loan when a medical emergency arises, not when a potential borrower is planning a shopping trip. It is important not to make taking out loans a habit, though they can be very helpful to alleviate some financial pressure for a time being.
Taking out a bad credit loan might sometimes seem to be the only option, and it’s a fine last resort option as long as the consumer knows how to handle the loan responsibly. In order to make good credit habits, consumers should plan to pay back all loans on time and consider every option when thinking about borrowing.