How To Avoid A Bad Credit History

Everyone begins with a clean slate in regards to their credit rating. However,as soon as you open up your first financial account,you will be on your way towards establishing a good or bad credit rating. If you are committed and have self-control you can prevent bad credit by making the right choices when dealing with any financial account. Bad credit can haunt you for years and therefore,this short article is going to provide you with some important tips on how to maintain good credit.

Pay Bills On Time

Paying your bills on time every month is perhaps the easiest,yet most important,way to avoid bad credit. Your payment history is the number one factor that will affect your credit score. Missing a bill payment by 30 days or more can completely devastate your credit score. When your bill payment is late,it will drop your credit score by several points. Of course,not paying your bills on time can also lead to repossession,foreclosure,and hounding by aggressive collection agencies.

Credit Cards

Whenever you apply for a new credit card,it will add an inquiry to your personal credit report. These types of inquiries make up 10% of your overall credit score. You may end up lowering credit points by having too many credit card inquiries. Also,the more credit cards that you have means that you will also have additional balances and payment responsibilities.

Having a bad credit history will make it difficult to secure a loan or credit and you then may have to use a poor credit loan provider such as Therefore,consider the above information. It can help you to establish a good credit rating and maintain it year after year.

Too Much Debt

The second biggest factor that will influence your credit score is your level of debt. Your personal credit score will consider the amount of debt you have,your credit card balances,and your loan balances in relation to the original loan amount. Make sure that you are regular with your loan payments and keep all of your credit card balances as low as you can. Remember,too much debt will make it hard to make regular payments. Therefore,if it appears that you have too much debt,it is important to reduce your credit card spending prior to getting into financial trouble.

Money Management

People who are bad with money management may also have trouble making loan payments and credit card payments. Usually,the ramifications are a poor credit rating that will soon follow. Proper money management will benefit you by keeping you out of debt,helping you to reach financial goals,and protecting your credit score.

New Expenses

It does not matter whether you are buying a new car,upgrading your Internet or phone service,or planning for an elaborate vacation. It is important to give some serious thought when adding a new monthly bill. Think about how it will affect your overall monthly payments and whether you can manage it.

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