How will my Bad credit History Affect me?
Many people grow up never learning or understanding the value of money. Their parents don't teach them because they were never taught either. This can cause a lot of problems for them and in some cases ruin their lives. How does this happen?
People that don't understand money spend it without thinking. The spend all their money mindlessly on things they don't really need and they never think about the consequences. Eventually, when they have no more money, they turn to credit cards.
When shopaholics get their hands on a credit card, bad things happen. They charge everything to it and only pay the minimum payment. This leads to interest and all the debt begins to pile up. Soon they are unable to even make the minimum payment. This can lead to thousands of dollars in debt and possibly bankruptcy.
Whether you are in this position or a much less severe version, it will lead to a bad credit history. You probably hear all the time how awful it is to have bad credit. Unfortunately, no one is going to tell you otherwise. Bad credit is bad. Not paying money back on time when you promised you would is wrong, and rarely do wrong deeds go unpunished.
You don't get a slap on the wrist when you miss a payment, but it is likely to affect you poorly in the future. If you have bad credit history and a bad credit score, the next time you go to apply for a loan, it will be very hard if not, impossible. Lenders will not lend you money if you have very bad credit, and if they do, you will be charged a very high interest rate.
Lending money to someone is a risk. The person who is lending the money can't be sure that they will get the money back, this is why they look at credit. If you have no credit, you're going to have trouble getting a large loan, especially a mortgage if you don't have a cosigner.
When you have no credit, or even bad credit, a cosigner is one way to get the loan you need. A cosigner is someone who has good or excellent credit. If they cosign the loan with you, the lender will check their credit and give you a loan based on that. If you stop paying, they have to pay or else their credit will be damaged. It is very hard to find a cosigner.
If you can't seem to pay your bills, in order to keep your credit from going down hill, you need to be proactive. Come up with a plan and a budget to live by. Cut out expenses you don't really need so that you can pay our bills. Do whatever you can to pay off your debt.
People that don't understand money spend it without thinking. The spend all their money mindlessly on things they don't really need and they never think about the consequences. Eventually, when they have no more money, they turn to credit cards.
When shopaholics get their hands on a credit card, bad things happen. They charge everything to it and only pay the minimum payment. This leads to interest and all the debt begins to pile up. Soon they are unable to even make the minimum payment. This can lead to thousands of dollars in debt and possibly bankruptcy.
Whether you are in this position or a much less severe version, it will lead to a bad credit history. You probably hear all the time how awful it is to have bad credit. Unfortunately, no one is going to tell you otherwise. Bad credit is bad. Not paying money back on time when you promised you would is wrong, and rarely do wrong deeds go unpunished.
You don't get a slap on the wrist when you miss a payment, but it is likely to affect you poorly in the future. If you have bad credit history and a bad credit score, the next time you go to apply for a loan, it will be very hard if not, impossible. Lenders will not lend you money if you have very bad credit, and if they do, you will be charged a very high interest rate.
Lending money to someone is a risk. The person who is lending the money can't be sure that they will get the money back, this is why they look at credit. If you have no credit, you're going to have trouble getting a large loan, especially a mortgage if you don't have a cosigner.
When you have no credit, or even bad credit, a cosigner is one way to get the loan you need. A cosigner is someone who has good or excellent credit. If they cosign the loan with you, the lender will check their credit and give you a loan based on that. If you stop paying, they have to pay or else their credit will be damaged. It is very hard to find a cosigner.
If you can't seem to pay your bills, in order to keep your credit from going down hill, you need to be proactive. Come up with a plan and a budget to live by. Cut out expenses you don't really need so that you can pay our bills. Do whatever you can to pay off your debt.
About the Author:
Do you want to raise your credit score? Find more information and ways to fix your credit so that you can get loans when you need them.
posted by Credit Counseling at
8:33 AM
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