The Aftermath of a Poor Credit History
By: Ajeet Khurana
Credit records are rather fragile. The smallest mistake could cause them to shatter. That is why one must try to stay away from defaulting and running up huge debt. If you are in such a situation, take action now. Assuming you've managed to nip the problem in the bud and are slowly getting your finances back on track, there's always that uncomfortable moment when your previous credit record can crop up. Now, this might not cripple you. However, credit ratings are delicate things. If somehow, your credit scores have become adverse, you are going to have to work very hard at bettering them.
The good news is, even if you do have a less than sparkling record, you should still have enough opportunities to clear your name and get back on track for having no problem applying for credit cards in the future. If you want to get your credit scores back on track, you will have to find a way to repay all the debts that you owe. A poor credit history is there for a reason, and it won't improve until you pay off the debts that dragged you there in the first place. Your credit ratings are going to continue to suffer for as long as you are unable to pay off your debt. Get rid of the debt, and you reduce the load you'll have to lift each month as well as showing that you're taking action to potential creditors.
Minimum repayments can be a major drain on your credit history if you keep failing to meet them, which would only make your situation worse. It would be a good idea to get in touch with your creditors. Talk to them about your financial difficulties. See if you can negotiate some easier terms into your deals. There are enough ways of trying to cut out the late payments that you'll find one (or more) that will work for you, but until you've paid them all off, there's still that blemish on your record. If your credit records are not good, most lenders will stay away from you in the future. Securing loans won't be easy. What can you do about that?
One thing that you could do is to voluntarily lower your credit. If your available credit is already low then creditors won't necessarily have too much to quarrel about loaning you money, and tidying up all the itty-bitty payments. Again, talk to your creditor directly about ways of doing this, as they're often more than happy to offer advice on ways of getting their money back. This is a highly recommended step as having few payments to make every month, even if they are slightly larger, generally looks better on your credit history. Why? It shows you can manage your money and debts better than someone who owes the same amount, pays the same per month, but has it spread over twice the number of creditors. It might help your credit reputation if you make an effort to improve your situation. Recovering from a spurt of overdue bills that have tarnished your credit record is by no means impossible. The best way to rebuild your credit scores is by starting right away.
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