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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