"There is no such thing as bad credit, but there is such a bad thing as a bad spender with a credit card or loan" -Me
Before I start this post, I warn new credit cards users. DO NOT RELY ON THE CREDIT CARD. It's DEBT! I have learned my lesson, hitting rock bottom on many credit cards. After a slap in the face, I realize that credit cards are tools for building credit, and that any tool can become a deadly weapon.
Credit Cards are a dreadful reminder of how much we will owe, if we decide to spend. Some people forget that credit cards are a liability. Its a contradictory tool. At times we hate it, and at times we love it.
I'm not saying credit cards are bad, I'm just saying that they should be used wisely to help build, not break.
Building good credit is tough, especially for someone new to the credit world or someone attempting to recover from bad credit decisions. These are the questions I asked, and after some research, I've come up with some answers.
HOW LONG WILL BAD CREDIT DECISIONS AFFECT ME?
Well, according to the Fair Credit Reporting Act, any information, whether small or large, can be included in your credit report for seven years!
Exceptions are as follows:
- Information about criminal convictions may be reported without any time limitation.
- Bankruptcy is up to 10 years
- Information reported in response to an application for a job with a salary of more than $ 75,000 has no time limit.
- Application for more than $ 150,000 worth of credit or life insurance has NO time limit.
- Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer .
WHAT CAN I DO TO RESCUE MY CREDIT SCORE?
Before attempting to rescue your credit report, get a credit report. Everyone is entitled to a free one every year!
First, is the stress from paying off the debt. Credit counseling may be the best answer for an individual making tough payments to their credit card company. A credit counselor can contact your credit firm, and rid of extra financial charges, possibly making your payments lower anywhere from 10-30%!
Second, continue to pay whatever credit related debt you have already. Examples include, but are not limited to paying rent, finishing up a car payment, and utilities.
A good piece of advice is that once you are done paying off your credit balances, don't just close them, keep using and paying, but in small amounts that you know that you can pay off. This will show credit companies that you have turned a new leaf and that you're ready for good credit ratings.
If you manage to somehow be extremely late on a payment, rebuild quickly and diligently. Make paying off your debt a necessity and not some accessory.