Things Which Can Hurt Your Personal Credit Score

Upon checking your credit report, a creditor can approve or disapprove your application based upon your score. If you have a low score, you may find that it’s more difficult to get approved or to get a good deal.

 

Indeed, consumers need to keep their personal credit in good shape. More importantly, you need to be aware of the thing which can hurt your personal score.

BadCredit1. Late Payment Submission

The FICO score is made up of 35% payment history. That means even occasional late payments can have a huge effect in your credit rating. If you have bills to pay, don’t wait until your due date arrives before making payment. To be safe, pay your bills as early as you can.

2. Neglecting Debt

If you don’t have money to pay your debts, the worst thing you can do is ignore your creditors. Get in touch with your creditor and explain your situation. Request if your due date can be extended or try to negotiate for a new arrangement. Most creditors would be glad to help out a borrower in a crisis. The most important thing is to show your creditors that you are doing your best to keep up with your obligations and to avoid defaulting from your payments.

3. Charge-offs

Past due debts can be charged-off. That means your credit has given up collecting payment after a long period of delinquency. Of course, such a remark puts you in a bad light as it sends the message to other creditors that you have not taken responsibility over your debts.

4. Debts Passed on to A Debt Collection Agency

Before or after charging off your debts, a creditor may pass on the collection of payments to a debt collection agency. This will also be indicated in your credit report. As with charge-offs, debts passed on to debt collection can send out a negative impression to future creditors.

 

5. Foreclosure

If you have defaulted from your mortgage loan payments, then your property may have been foreclosed by your lender. A record of foreclosure can remain in your credit report for up to seven years and is also derogatory.

 

6. Bankruptcy

If you have filed for bankruptcy, then it will also be reflected in your credit report. Having such a record can badly damage your personal credit score and you need to exert extra effort and wait for at least two years to see an improvement in your rating. This is why borrowers are advised to consider bankruptcy only as a last resort in resolving debt problem.

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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