Bad credit decisions can literally devastate an individual and it is important to avoid them. Consumers who do not have enough knowledge regarding bad credit often run in problems. It often occurs that individuals commit themselves to unrealistic goals, which lead to long-term financial problems.
Bad credit Decisions – Lack of Regular Repayments
Every wonder why every time you check your FICO scores, they are low? People who have taken dept often forget to make repayments. If not that, then many individuals avoid making repayments until the last moment.
If occurs that the lender has to remind the borrower about the loan repayment. Utility bills pile up and money for insurance and mortgage payment remains. All of these are small indicators that the loan borrower is slowly becoming financially distressed.
Neglecting Repayments – Pay Bills on Time
A common mistake bad by consumers is that they do not pay off their bills on time. When bills start to pile up, the credit report is tarnished. Repayment of loans and all other liabilities must be done on time to avoid this. It is a bad credit decision to not pay off repayments. There are ways to manage these large bills. Individuals who face severe problems in this regard may take help from a counselor. It is a good idea to sort out these repayments and start by paying the most important payments.
credit cards are one of the most important causes of bad credit. The list of bad credit decisions include using up the entire credit limit on the credit card. It is advisable that credit card holders only use up to 30% of the total credit limit. If all credit cards are used up, lenders will see it as a risk. The credit card holder will be considered as a consumer in too much dept for any further monetary grant.
credit scores can be lowered instantly if the consumers apply for different credit at the same time. The same is not applicable if the consumer applies for same type of loan through different lenders. The credit bureaus keep track of all transactions and applications. This is another bad credit decision which can ruin individuals and/or families slowly yet steadily.