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					The Causes Of Bad Credit

There are many causes of bad credit, ranging from a complete financial disaster to
missing a payment on a credit card and being hit with a late payment. Each has a
different effect on the credit score. In some situations it begins to snowball and ends
with a completely destroyed credit report. The most common cause of bad credit is
missed payments. Credit cards, installment loans, car payments, mortgage
payments, etc. Sometimes it isn’t because of a lack of funds, but just poor time
management. With current technology most companies now offer payment options
online or via the phone. There really isn’t a reason to miss a payment these days if
the money is available. Sometimes a financial hardship occurs that is beyond one’s
control and a payment has to be skipped. In this situation the credit score is going to
take a hit, and it could drop anywhere from 50 to 120 points. The best thing to do is
to maintain a perfect payment history from that point on. Each month of positive
reporting will make that late payment less of an impact on the credit score. Time will
heal this as long as there are no other delinquencies reported.

There are other life experiences that can ruin someone’s credit such as a loss of
employment, illness or even a divorce. All of these examples can create a financial
mess and a damaged credit report. If it gets to the point that you cannot pay any of
your bills and all of the accounts are being charged off and you are in danger of
repossessions and foreclosures then you might want to seek legal help. You will need
to know how to protect yourself and your family if it gets too severe. The last thing
you want is a flood of lawsuits from debt collectors coming your way. Bankruptcy
might be an option if it gets out of hand. A quick online search of local Attorney’s will
provide some options.

Sometimes an individual will know they had some financial problems in the past,
but didn’t address the issues at the time. If you find yourself looking at your credit
reports for the first time you will want to mark off anything that is questionable.
Distinguish the negative items and see if you can recall what each negative is. Old
accounts, collection accounts, public records, etc. You want to dissect the report to
the best of your ability. Once you have an idea of what is going on with your credit
report you can seek out a credit repair company to help you clean it up. Many will
offer a free consultation and go over your report with you to help identify items that
can be challenged. If you are in need of your credit report from all three credit
bureaus you can visit www.mycreditbureaus.com and take advantage of their free
credit score offer. That site gives you instant access to your credit report and will
continue to monitor your credit on a monthly basis if you desire. That is a great tool
to use to ensure that you keep track of your credit’s health.

				
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posted:10/7/2012
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