Good credit is important to have for a number of reasons. For example, it affects your chances of purchasing a home, financing a vehicle or getting a loan.
In order to get a home of your choosing, you need to be approved for a house mortgage, and this where having good credit comes in. Your credit score will affect how much interest you pay if you get approved for a loan. This means that your mortgage payment will be a lot higher. If you have a bad credit score it could even cause you issues renting. Also, your credit will affect what kind of car you’re able to get, and what your car payment will be. It can even affect your chances to get a job or start a business of your own. When you have a house and make house payments, you also need sometimes need good credit in order to set up your utility accounts.
Getting Bad Credit
You can get bad credit if you miss payments on your bills or if you pay them late. Also, bankruptcy, state or federal tax liens, and legal judgments will work against you in terms of your credit and can lower your credit score a great deal. There are companies out there than can keep track of your credit history and use that information to create a credit report. Your FICO score comes from this data of collected information, and organizations can look at your FICO score or credit reports in order to determine whether or not you have good or bad credit. Credit scores range from 300 to 850, where the higher the score is, the better.
If you do have bad credit, try not to worry, you can rebuild it. However, there are certain steps you need to follow in order to accomplish this. There are many credit repair companies that can help you get back on track so that your credit won’t decide what you can and cannot do. Not all of these companies are equal, so you do need to be cautious when you do choose one. Some well-known and reputable credit repair companies are Credit Saint, The Credit People, and CreditRepair.com.
Avoiding Bankruptcy
It is important to remember that filing for bankruptcy is not a way out of all your debts. There are still some debts that you may be required to pay back. If you own a home, you’ll need to make arrangements with the help of a bankruptcy attorney to allow you to continue making payments on your home.
Repairing Your Credit
A credit card company works with you to help get rid of any bad marks on your credit report, but for a certain cost. The cost differs from company to company, but once you hire a credit repair company to help you fix your credit, they will take a look at the current state of your credit and work with the credit bureaus for you. It can be a heavy burden lifted off your shoulders to get your credit repaired. It will allow you to get a home, a better car if you want, and even a better job that will help you to continue making payments on time. It’s not impossible to get good credit, even if you have bad credit—getting credit score help is a great start towards building up good credit.