Tag Archives: debt
Quick Fix to Bad Credit Score
A bad credit score is one thing that financially independent individuals should avoid. This is detrimental in many aspects of their financial lives. For instance, a bad credit score can void them of good jobs. This may sound unbelievable but indeed it is true. Many employers seek out those potential employees who do not have uncontrollable debt. This is because a bad debt can rid a person of his concentration. At work, an unfocused employee can cost losses in profits. This person would not be able to perform well thus possibly dragging the company down with him.
Another bad result of an undesirable credit score is disapproval of loans. Loans are critical for building ones life. A person needs loans for buying his own house. He needs it for owning a car, putting up a business and more. But with a bad score, all of his goals may not come true in a smooth manner. He can get approved on such loans only when his score is above 700.
A bad credit score is brought on by unpaid bills or late payments. This is usually the case in a massive credit card debt. People apply credit cards promotions and get hooked on spending. Before they know it, they are in too much debt. A lot of people disregard their pending payments. They only get surprised when they apply for a loan and their credit reports are shown.
However, there is a quick fix they can do to change their fate on loans. Note that credit bureaus have a method of scoring. One way is by checking a persons recent payment history. It means that what matters in their scoring is the recent payment activity of a person. Therefore, an individual can up his credit score by making recent on time payments.
For his credit card bills, he can opt for credit card balance transfer. When all of his credit card debt is in one place, he can make efforts to pay on time. It wont be as hard this time because of only one bill and one interest rate. Utility bills also matter so he should always look out for the deadline. He should pay before the due date just to make sure. Also he can cut off some of his unnecessary spending. This way he would have extra money for the payments.
Doing this for at least six months can increase his chances on a good credit score. After which he can then take on some loans.
Why is debt consolidation preferred these days?
Trapped in the complicated world of increasing number of unpaid debts? You may end up in many conditions after this. May be a very bad credit score will lead you to bankruptcy, or you can negotiate with your creditor to settle down an intermediate way of payments but the most used option these days is to apply for debt consolidation that is ask for a bigger debt on a collateral you own (secured loan) with a lesser interest rate. The reasons for opting this choice are many and we& 8217;ll consider the causes of its enhancing demand in the debtors these days.
1. With the demand and luxurious explosion in today& 8217;s life, people find it impossible to adjust the monthly income into a suitable budget and so they have to have debts which remain unpaid due to the same reason. After getting into such a financial crisis they try to find an easy way to get out of this and that is debt consolidation.
2. Financial instability is also another important reason to get trapped in many small loans for daily expanses. It usually is encountered in the sure hope of a better and financially sound future that even becomes far away after this.
3. The ability of people to reduce their debts and also to pay regularly their monthly payments leads them to the complicated world of debt consolidation. People find it difficult to improve their credit score by paying the debts regularly so before bankruptcy this is the last option available to them that is to have debt consolidation.
4. Financial instability is also a reason to get people toward offering their valuables as collaterals for having a debt consolidation. In the previous times, financial stability was not acuity but financial security was. In these days it is getting less reliable that& 8217;s why people are using collaterals like houses and cars etc.
5. Interest rate appears to be a curse for a debtor because it is paying more than your original loan was, so everyone tries to reduce it as much as possible and debt consolidation is considered to be an important tactic to lessen this interest.
Debt consolidation may appear to be a very feasible and convenient option but sometimes it is not. Because it obviously leads you to payment of a huge debt with the extension of duration and you also tend to lose the ownership of whatever you own. Then involvement of debt consolidation companies especially those of a bad repute and non-trust worthy will lead to many complications in the whole matter of payments.