Lets face it: Bad things can happen to good people. You might have never
thought that one day you’d have a poor credit score
and then life just doesn’t go your way. Before you know
it, many financial institutions consider you a high risk.
You will not be able to obtain a loan and hence you have no
chance to buy a home or a car or whatever you need.
On this page I would like to suggest a few things you can
do to prevent getting a band score and how you can improve
it after you have had trouble.
Most people don’t know their credit score in the first
place. For most individuals their credit reports are not that
important. But if you suddenly get turned down for a credit
card or a loan, you may want to check it. Oftentimes your
score may be bad due to an error in the report or due to somebody
filing a fake complaint about you just to cause you trouble.
Improving your credit score is essential to obtaining a loan.
There are institutions and individuals who will lend money
to high risk clients, but the Interest rates will inevitably
be much higher. Also there are a lot of “loan sharks”
around with which I would never do any business. You should
also beware of them. Do get your loan through an accredited
institution. There are even consumer agencies around who may
be able to help you find one.
The first step in building a credit history usually means
trying to get a credit card. Most card issuers will give cards
to people with bad credit ratings. These cards will most likely
have a very low limit, often less than $100. Also there is
usually no grace period meaning that you pay interest right
away or very soon after your purchases. It is absolutely essential
that you pay off your card every term (usually once per month).
The card issuer will report this to the credit bureaus and
eventually may raise your limit.
As your rating improves you may be able to get better conditions
for credit cards and you can also start taking out smaller
loans if needed. One thing you have to keep in mind is that
once you have had a low credit score you are under higher
scrutiny. While a missed payment would normally not hurt too
much, it will affect you very badly and may completely destroy
all the progress you have made.
It will take several years of discipline and care until you
will be “washed clean” of your past mistakes or
the bad luck that may have hit you without your fault. But
it’s worth the effort. Eventually you will be able to
buy that car or that house you really want. So start building
your credit score right now. But beware of offers that just
simply look too good to be true. Usually they are and there
are a large number of crooks out there who are feeding off
people like you. If you are not sure, better be very careful.