There is no denying that bad credit scores have a negative impact on the lives of those who have them. They can be a source of stress and worry and often cast a dark shadow over the prospect of getting financial loans and assistance should the need arise at some point.
Before going into how to avoid getting a bad credit score we need to have a good understanding of how people end up getting them in the first place.
There are several factors that are guaranteed to negatively influence a person’s credit standing. One of the main factors is a history of missed or late payments. Another factor could be a person’s residential history. Lenders like to see some form of continuity so if someone’s address is changing every year, it can have an adverse affect on their credit score.
Changing jobs ever so often can have the same negative effect. People who have been working for one company for several years will generally have a much higher credit score.
Applying for credit a few times within a short period will have a bad effect on credit standing. That is obviously worrying to lenders as it gives the idea that the person is in desperate need of additional finances.
Usually when you apply for a loan, lenders will have a detailed look at your credit score and you will be ranked accordingly – either as having bad credit, good credit, or excellent credit. Of course we would all like to receive the “excellent credit” verdict.
Here are a few things you can do to avoid ever getting a bad credit rating:
- Most importantly, you need to make sure you pay your bills on time. Don’t wait until the last minute or until you have incurred unnecessary fees because of late payments. These bills include car payments, mortgage payments, and any personal loans you may have.
- If you are struggling to pay one of your creditors rather call them to try and make a plan before things get out of control.
- Lastly, try to avoid maxing out your credit cards as this can have a negative effect on your credit rating. Try to keep your balance low at all times as a certain percentage of your credit score is worked out by finding out what credit you have available.