WHAT IS BAD CREDIT HISTORY

Bad credit means poor credit resulting from past dues that have not been paid by you on time. Your irregular past payment obligations. If higher interest rates are being charged to your accounts, in case you have been filed for bankruptcy and your account has been sent to the collections departments these are signs that you have bad credit. There is no fixed credit score number that can be qualified as Bad credit. But a credit score that comes under 620 is considered as bad credit.

Bad credit means your credit history.It means that you have not paid your bills or dues on time or ar possess risk to loan money to.Bad credit affects not only how much you can borrow but what it costs to borrow.

When lenders decide about whether to grant you a loan or not they first look at your credit history to check if you are a worth the risk ,meaning the lenders have an assurance that they will get their money back or you are a bad risk that is someone who has the habit of not paying your dues on time,

Bad credit is basically the result of not making timely payments,declared bankruptcy and borrowing too much money at a time.

Effect of bad credit on your accounts

You will not be granted loans by lenders and financial institutions as your bad credit gives them an indication that you will not meet your loan obligations responsibly. Bad credit will result in your application being denied by the lenders

Even if your loan is approved you will end up paying extremely high rates of interest to the financial institutions

Like a good credit score makes your life easier,similarly a bad credit score can make life extremely difficult and expensive for you.

In case you are looking for employment, you bad credit score will make it difficult for you to get a job as bad credit will give a negative image about you to your employers. They might not consider you to be a suitable and potential candidate for their companies.Even you are employed you will never get the benefit of getting a raise or promotions from your employer

Your landlord will not easily give you accommodation if you have a bad credit score.To get accommodation you might have to pay a huge amount of security deposit to the landlord.

In case you are planning to get utilities turned on in your name,the company will check your credit score to decide whether you should pay a security deposit.

Important steps that you can take to repair your credit score yourself

Improving your bad credit will take some time. and for that you need to be more responsible in managing your credit and your payment history.

Check your credit report-The first step that you can take in repairing your bad credit is get a free copy of your credit report from all the three bureaus and check for any errors in them.Your credit report contains vital information related with calculation of your credit score.You need to check that no late payments are incorrectly mentioned for your accounts and the amount that you owe is correctly calculated.late payments and charged off accounts remain on your credit report for nearly 7 years and bankruptcies for 10 years.Most creditors look for payment patterns in your credit report so concentrate on making consistent payments.

This can contribute towards moving your credit score up .By regularly making your payments every month you are rebuilding your payment history which will help a great deal in pushing your credit score in the good score range.

In case you have multiple accounts and find it difficult to keep track of dues on each account every month,you can consider enrolling for auto debit facility of payments automatically debited from your account every month.

Dissolve your debts.Try to pay them off as early as possible.Make a payment plan of paying off the account that is being charged with higher interest rates first,while continue to pay minimum amount due on other accounts.If you are facing difficulty in making your payments,call your creditors and try negotiating with them.You can ask the creditors to reduce the monthly payments amount that you have to pay or change the due date on which you have to make payment every month.