Why is my credit score bad? | Why is my credit score low? | Why do I have poor credit?



  It's never too late to take steps to repair your credit score!

Identify the source causing poor credit & learn to manage your life circumstances.
Debt:
  • Many people and businesses carry some type of debt, i.e.a home mortgage, line of credit, credit card debt, or student loans. 
  • Some debt can be a good thing as it may be used for the purchase of a home, or investing in additional education. Loans taken out for business help them to grow and expand. 
  • Too much debt can lead to bankruptcy, putting at risk your home or business. Debt becomes a viscious cycle: the minimum payment you are required to make could equal the amount of interest the credit card company is charging.
  • Read on for the long and short term effects of debt and tips for budgeting your expenses


Credit Card Debt:
  • Most of us use plastic because it's fast and easy, getting into credit card debt is also fast and easy.
  • Credit card companies make money when you don't pay your bill every month, plus the late payment fees, and perhaps their option to possibly increase your interest rate. Debt continues to grow. Credit Cards are convenient, who needs cash?
  • With technological advancements one can sign up for direct deposit of checks, internet banking and internet deposits of checks via a photo of a check, etc.
  • Read on for tips about the responsible use of credit cards.


Unemployment and Loss of Income:

  • Loss of your job is a traumatic event especially if you are the family breadwinner.
  • A sudden loss of income will dramatically change your current lifestyle.
  • Losing your job will not directly affect your credit score, in fact your employment and income are not factors directly impacting your credit score. Creditors and the Credit Bureaus may not know you've lost your job unless you advise them.
  • Your credit score could be indirectly impacted if you fall behind in paying your financial obligations.
  • Don't let yourself go into shock mode and postpone tightening the budget. Until you get on your feet with another job, act quickly, you may have financial obligations you are committed to, i.e.:house payment, car payment, minimum payments on credit cards, student loans, etc. 
  • Many employers are now requesting a credit check as part of the hiring process, being denied a job because a prospective employer is viewing a poor credit history report is inexcusable. 
  • Read on for the affects of Job Loss on your credit score and how to handle credit and bill payment while you are in between jobs.


Divorce:
  • Not only emotionally draining but commonly, divorce is a financial drain.
  • Dividing assets and debt can create financial burdens and resolving them is a lengthy process. 
  • Credit card accounts that are held in one spouse's name are the responsibility of that person after a divorce.
  • Credit problems may arise when the account holder has a low income or is not employed outside of the home. 
  • Financial responsibilities will be challenging to meet on a limited income, and late or missed payments have a negative effect on the account holders credit record. 
  • Read on for tips on how to establish credit and thwart credit issues relating to divorce.


Medical Bills:


Foreclosure:
  • A foreclosure remains on your credit report for 7 years.
  • It's impact to your Credit Score will lessen over time.
  • While a foreclosure is considered a very negative event on your Credit Score; it will not ruin your score over an extended time.
  • As long as you keep all of your other payment obligations in good standing, your Credit Score can rebound in as little as 2 years.
  • The important thing to keep in mind is that a foreclosure is a single negative item. Keep this item isolated to a single account, like your mortgage account.  It will be much less damaging to your Credit Score than if you had a foreclosure in addition to defaulting other credit obligations.
  •  Read to learn more options than just foreclosure.


Bankruptcy:
  • Filing for bankruptcy will be factored into your credit score until it falls off your report. 
  • It may take up to 10 years to fall off your credit report.
  • The impact will lessen over time.
  • After bankruptcy has been filed it's your job to begin re-establishing credit in good standing.
  • A good practice is to obtain a credit card and make all your payments on time. 
  • Use 30% of your available credit at any given time; in credit report language it's called Credit Utilization Ratio. This refers to how much credit you have available to use versus how much credit you are using. 
  • Car Loans are one of the ways to help get back on the road to good credit. 
  • A mortgage or car loan is a secured debt which means the lender has the right to foreclose on your home, or re-possess your car. Which is why lenders are more likely to give you a second chance.
  • Read to learn more about bankruptcy, Bankruptcy Frequently Asked Questions and tips.