What Happens When Good Credit Goes Bad

For all the different reasons, people’s credit simply is not as good as it used to be. Perhaps it is those debts that are waiting for her to get a job. Perhaps it is the fact that he never had credit before this. Whatever the reasons, often times, due to circumstances beyond our control, credit will go from good to bad.

Why Good Credit Goes Bad:

There are several reasons. Perhaps you had a divorce, and the person that you were divorcing from decided to take all of the money out of the joint account, and then some, leaving you with the bill. Perhaps you thought that leasing that store front over there was your original idea of a great time, but the work was much harder than you thought, and you had to close down the store. Perhaps you cosigned on a property out in the middle of nowhere, because a family member thought it was a good investment, but found out later that it was as you thought, just a piece of land in the middle of nowhere. Perhaps you can’t get credit because you have never had credit, and you never wanted credit.

In order to fix your credit, you will need to find out what went wrong, which brings me to my next point:

How to Make Bad Credit Good, Again

The number one, most important way to start making your bad credit good will be to order a report from the local credit bureau. Without this report, you will have no idea what is wrong with your credit, and ergo, will have no idea on how to fix it. A few places to keep in mind ordering your credit report are Experian, Trans Union, or Equifax. There are hundreds of other good, honorable, credit bureaus, but for all the good bureaus out there, there are also bad ones. Make sure that you are ordering your report from an authorized agency. If the agency you pick seems shady, it probably is, and places like that will use your information to steal your identity, and drive your credit score even further into the black. So, please, get your credit score from a good agency. Also remember, do not give out your information over the phone. Most places, if not all, request for you to fill out a form, and mail it in, or fax it in.

After you are finished with the first step, and you identify the problem, then move onto step two, which is fix it. Sometimes it is not a simple matter of just paying off your debt. If your debt is substantial enough, you may want to request a professional debt counseling and settlement service. They can usually help you reduce the balance by as much as fifty percent, by making monthly payments. People can usually pay off all their debt in it’s entirety in one to three years.

Whatever your debt, keep in mind that this situation is temporary, and that once you’re done paying off your debt, you will be done for a while.

Repairing your Credit Score

For the record, I do not endorse free credit report.com, probably because it actually is not free. That is all.

Every time I turn on the television, it seems that I’m watching another add from Freecreditreport.com. Their catchy jingle and the upbeat tempo make you really want to go to their website. Buy why are credit reports so important? Why would you want to enroll in Credit Advantage in order to keep an eye on your credit score? Because it can ruin your life.

How to get a Bad Credit Score:

Someone can get a bad credit score in one of several ways. Sometimes, when you’re going through the pitfalls of a divorce, or you break up with a significant other, that other had their name on your checking account, so they will take all the money out. Perhaps you took on a loan for your daughter’s brand new Audi, the really fancy one with all the bells and whistles, and even though she promised to pay the loan, she didn’t. Even when you co-sign a lease because your brother had this great idea for a business, that pretty much fell by the wayside, and you were stuck picking up a tab that you simply couldn’t afford. It could even be as simple as a typographical error, incorrect paperwork, or someone at the credit bureau mishandled your paperwork.

The Reasons Why You Want to Fix the Problem:

Accidents happen, such as flooding, electrical, and heaven forbid someone gets hurt enough to endure a hospital stay, and you have to take out a loan to fix that problem. If you have an outstanding debt on your credit score, nobody will want to give you the money you need. Or, if they do give you a loan, they will charge you higher interest rates, and should you miss one payment, you will be hearing from their collections department. Once you fix your problem, however, you will have a fresh clean start with lower interest rates, and no debt collectors banging at the door.

Conditions

It must be noted that in most states you cannot actually remove the credit problem all together. However, if you pay off the debt, then the record will show that you did indeed finally pay off the debt, and that a new credit may be given to you.

How To Fix Your Credit Score

First, you will want to find out what is wrong with your credit score. You will want to request a copy of your credit score which is obtainable for free for all three credit bureaus for free, once a year.  You can also order the copies from a qualified vendor such as Creditscore.com or Annualcreditreport.com. Once you know the problem, you will be able to fix it. Sometimes, if you feel that the debt is too much for you to handle, you may wish to consider help from a professional debt counseling and settlement service. Firms like these will help you set up a payment plan, keep track of your spending, and will help you pay off the debt in one to five years.