Advice

A Stitch in Time…Avoding Bad Credit

Bad credit is not something you think about until the time comes for you to take a loan. So before you get to the point where loans are refused to you on those grounds, take some steps to avoid that situation.

Check your credit report. This can help you avoid trouble in several ways. More often than not, you are likely to find inaccurate information in the report. At this point you should immediately file a dispute with the credit bureaus and the creditors. Doing this before you apply for a loan or a credit card will save you a lot of trouble.

But what if the data is not wrong? There is a positive side to this as well. Now you know exactly how much you owe and to whom. The next step here is to talk to your creditors. By explaining to them as to why you are unable to pay them, you can negotiate a new payment plan or even a lump sum payment. Don’t be afraid of doing this as it is in your best interests. Do not resort to debt settlement companies. The benefit you gain from them is soon lost as you start to realize the long term impact on your finances when you use one.

Try to make your payments on time; this is one of the best ways to keep your credit score in good stead. But the best advice of all is, don’t buy what you can’t afford. If you follow that piece of advice, your chances of getting into monetary trouble drop drastically.

Bad Credit Cards and Their Usefulness

If you have poor credit history, then you have no choice but to resort to a Bad credit card. Unfortunately this is a, minefield in terms of financial safety, to get into.

Bad credit card companies are notorious for their high and quite often unfair interest rates. They have very low standards when it comes to valuing your credit rating. This makes it easy for anyone to get a credit card from them. However, when you have a need to resort to one of these companies, don’t choose one on a whim. You need to do extensive research before you take a decision.

Every credit card has its own peculiar set of rules and regulations. You need to understand everything that is stated in the terms and conditions. This is because they can offer you low interest rates and then catch you out with hidden charges and a whole load of restrictions. You also need to check on other fees like over-the-limit fee, late penalty fee, annual fee, etc. One more thing to keep in mind is that the interest rate is usually based on the Prime Rate, which can change abruptly.

But the silver lining here is that by choosing a Bad credit card company that reports to the three major credit bureaus, you have a good chance of improving your credit status. Assuming you make payment promptly, these payments will be reported to the bureaus. Thus your credit rating improves.