Bouncing Back From Bad Debt
Good credit is essentially important. A person's credit score can affect many essential aspects of life, such as renting or owning a place to live, finding a job, running a business, and making important purchases. Having a heavy debt load can also cause stress, especially when creditors persistently call and send letters. Insolvency practitioners can help you find a solution, such as determining whether you qualify for bankruptcy, and if this is the best solution to get you back on track.
One of the first steps to achieving good credit is to know what your credit report says. You can receive one free credit report from all three agencies each year, but it is advisable to check your report more often. How much your reports are checked are one factor that affect your score (with more checking lowering your score) but you can sign up for a service that allows you to check your score without affecting it.
When you check your credit report, carefully review it. If you find any charges that you do not believe that you owe, some may be disputed. Even if you pay off bad debts, some may stay on your report for up to 7 years. Recent activity carries more weight than past activity. Credit counselling may be an option if you believe that you may still be able to repay your debts. If you realize that you cannot pay back your debts, you may wish to consult an attorney about your options. Although bankruptcy seems like a drastic option to many people, for some, it is a fresh start. In some cases, a person's credit score may actually improve after bankruptcy.
Debt recovery is a process that takes time, and it is more about consistency than a task that can be accomplished overnight. Make a habit to live within your means, and have savings in case of emergencies. You want to use credit to build a good history, but you want to make sure that you use it responsibly. Even one late payment can negatively impact your score, and you want to make sure that you pay off all debts in a timely manner. Try to pay off your credit cards every month and not carry a balance. This helps avoid interest, and it is also better for your credit score. Consistent habits over time are the key to rebuilding your credit score.
About the Author
John Greyson is one of the most knowledgeable guys in town, he knows everything you need to learn about business and law. Stay tuned for more of his practical tips and legal advices about debt recovery, visit http://www.redchip.com.au/services/debt-recovery/ .
Tell others about
this page:
Comments? Questions? Email Here