What is credit?
Credit is essentially the amount of money that banks, credit card companies, suppliers, etc. will loan you based on information about your ability to pay that money back to them within a reasonable timeframe at a specified interest rate.
Your credit history is essentially an historical account of your relationship with past creditors. Your credit history, along with your current income and debt, is used by potential new creditors to determine how much credit to extend to you.
How does my credit become "bad"?
Your credit can be impacted by a number of factors, only some of which are within your control.
- Late Payments
- Mistakes on the part of merchants or lenders
- Mistakes on the part of credit reporting agencies
- Identity theft
How do I know if I have bad credit?
Most people find out they have bad credit when they get turned down for a loan. Not only is this embarrassing, but it can delay or even ruin plans for major advances in your life, such as buying a home or getting married.
Take control!!! If you learn one thing from us, it should be that the people with the least credit problems are those that monitor and manage their credit.
Thanks to the Internet, credit monitoring is available to all of us now. That's right, the same information that lenders get about you after you apply for a loan is available to you before you apply for that loan.
Get a step ahead. Click here to learn about credit monitoring tools available to you.
What will happen if I have bad credit?
The answer to this question is that it depends. In some cases, you can set up a credit improvement strategy that will get you back on track with your plans quickly. In the worst of cases, however, you might get denied for loans.
That's why it's critical to be proactive about your credit. Even if you have had credit trouble in the past, by monitoring your credit and having a improvement strategy in place you can mitigate the impact of your past credit problems.
Who can help me if I have bad credit?
Most importantly, you can help yourself. That's right... The tools you need are available to you, and many of them are available on the web, accessible from the tools section of our website.
But there are also times when you may need outside help. Consider asking for help from a certified and licensed professional in one of the fields below:
- Attorneys - can often help if legal action needs to be taken on your behalf. For example, if your identity has been stolen or one of your accounts has been misappropriated.
- Accountants - can often help with a payment plan for taxes that are due.
- Lenders - can often help consolidate debt or reduce interest rates on outstanding credit.
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