There are many reasons to settle and take care of credit card debt. Not only can your credit score be adversely affected by an outstanding or unpaid credit card debt, but you can be taken to court for it as well. Being sued is never pleasant. Unpaid debt does have both legal and tax implications. Here’s what you should know.
Do away as well with the mindset that you will get a better score if you earn more. Having a high income, according to the experts, does not have any bearing on one’s credit card score. The benefit of a high income though is you can be approved of a loan faster than those who Primary Tradelines don’t earn much.
You are filing for bankruptcy because your debts have risen to such an extent that it just is not possible to manage it without external help. If your debts are to come down by 50%, don’t you think you can avoid bankruptcy, make regular repayments and reduce the debts in a time bound manner?
“I rarely ever use credit because I don’t like borrowing money and paying interest. I have a couple of open tradelines and a high Fico Score so I should be all set, right?” Wrong! It is possible for a person to have a 720 credit score with only 2 Seasoned Tradelines (accounts) listed on his entire credit history, while another person has a 650 credit score but he has 25 total tradelines on his credit report. 10 of those are currently open and only 1 account has ever been 30 days late.
Your bad credit may have be the result of any number of situations. Sometimes its due to poor budgeting habits, while sometimes it may be due to problems outside your control, such as a medical emergency. In either case, lenders only care about your score and rarely want to know the story behind it. Don’t leave your financial future in the hands of some bankers. Follow these steps if you want to learn how to rebuild credit quickly.
Scrutinizing your credit report for mistakes and inaccuracies is a tremendously key topic to try to look at. Sourcing a copy of your current credit report is really the first step to take. The next element here is to challenge in writing mistakes or inaccuracies you discover. The repair of mistakes and inaccuracies will genuinely raise your total score.
Get an installment loan such as an automobile loan. If you have student loans in deferment, start making payments. Maintaining a one-to-one ratio of credit card debt to installment debt is one of the fastest ways restore your credit score. By this, I mean one installment loan to one revolving account. Most importantly, never, ever be late on your monthly obligations, and try to pay down your balances whenever you can.