Things to avoid to prevent bad credit history

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Things to avoid to prevent bad credit history

Things to avoid to prevent bad credit history


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
A credit history is a treasure that you have to keep building over years. If you ruin your credit history, you will find it really difficult to rebuild it. Having no credit history is much better than having a bad credit history. A black mark on your history stays on your record for eight years. Those whom have the best credit records are those who make regular payments without default. We shall now discuss a few things that you must avoid at all cost. Missing out on payments are dangerous. Having an outstanding debt is okay. However it’s imperative to make the monthly minimum payments in order to avoid having to pay a penalty. If you miss a payment, your credit rating will go down. Making regular payments within the grace period however, will allow you to maintain a strong credit history. Defaulting on loans is a major cause for a bad credit history. This default will tarnish your credit history for a very long time. Getting rid of this will require strategic deployment on your part. Being unable to pay off the loan that you have taken from the lender, it’s recommended that you should try to reach a settlement to ensure that the lender does not report to the credit bureaus. However, you need to get concrete assurances from the lender, before you commit to the settlement as it can become hard to control them later. Filing for bankruptcy is a major default. It may be a very attractive option especially if you do not have any other exit strategy. A bankruptcy is the worst nightmare on your credit record. It can stay on the record for seven years. During those seven years you will not be able to acquire a loan to even buy a bicycle because of the lack of credit worthiness. Many balance transfers are also caused by the lack of a good credit history. You might be encouraged however, to go for balance transfers, or zero percent interest rate credit cards, but you need to realize that if you do this often, your credit history will be badly affected. Closing your old accounts will also reduce your credit score as this will reduce your credit limits.  A balance transfer will give you time to rebuild your finances, this option however, should not be utilized too many times as this will reflect poor budgeting. This can give you a lot of problems in future.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!