Your credit score says a lot about you and the way you deal with money.
Accessible by banks and financial institutions, and even the sofa store you’ve asked to give you the green light on a hire purchase agreement, so you can take home your state-of-the-art lazy boy armchair with cup holder, mini fridge and massage function thrown in for good measure.
Good credit score, bad credit score, no credit score — there’s no escaping it. You just have to settle the score and get in the creditors good books.
Maybe your problem is you’re more worried about getting the best sofa and less about your financial well-being, and it’s important to understand just how detrimental brushing this matter under the carpet can be to your future. It isn’t as cut and dry as you might think either.
Confused? Read on…
Bad Credit Means NO credit…
If a creditor sees you as a threat, you’re out of luck in the loan department.
Missed or late repayments on a credit card don’t go unnoticed sadly, so if you’ve been overspending on the plastic with no funds to cover it, you won’t be first in line when it comes to handouts later.
Even paying off the bare minimum each month, as far as banks are concerned, only goes to show that you’re having difficulty in making repayments and they won’t want to run the risk with you.
There’s method to the madness if you think about it.
Would you hand out cash to someone you thought mightn’t have the means to pay you back, or might take forever to do it? This is why credit score matters.
… But NO Past Credit’s No Better
Oddly, never having borrowed money at all EVER means you have no proof that you’re a deserving candidate for a loan, and with no proof that you’re good for it, makes for a case of guilty until proven innocent, and renders you no more desirable than the misbehaver.
Have a credit card, use it once in a while and pay if off in full when payment’s due.
Keep everyone happy, and when you eventually need a little helping hand, no-one will have a bad word to say about you.
Talk it Out
In the long run, talking is the best policy.
Your bank or creditor wants to know you’re not a flight risk and that you are committed to meeting the conditions of your agreement with them. If you’ve agreed on a set of terms with them, they’ll leave you alone, but disappear and your phone will be ringing off the hook, day and night.
So, you can’t get a mortgage now.
How long will it take to remedy the situation before going back to the bank? If the reason for your bad score is no credit rating, you can be up-and-running within a couple of months. It stands to reason that the worse your situation, the longer the road to recovery.
Worst case scenario?
Repeat offenders could be looking at a few years, especially if the IRS are the ones not being paid, but even missed mortgage payments can be forgiven in a year to 18 months if you pay up front and behave yourself in the meantime.
You can’t fix the problem until you know what they know, so get in touch to get up to speed and start doing something about it.
Aside from these credit-reporting agencies, can your bank give you a credit score? Some banks actually can and will, as long as you are a customer.
By knowing your credit report, you’re a great deal better off than many and are learning valuable lessons about how best to manage your money going forward. So look on the bright side and once you’re back on track, keep up the good work!