Are you currently just smothering under a pile of debt that continues to grow and grow? You might not have hit rock bottom just yet and you are probably thinking you will wait for the worst before you start to rectify the situation.
Unfortunately, this is not the way to look at your situation, as millions of individuals have already discovered the hard way. Sure, there are companies out there that can help you and tons of advice online that can assist you with getting your credit back on track, but until you really realize why you need to fix the situation, you probably are just going to let that debt continue to pile up.
1) The Situation Will Not Fix Itself
There is a reason that you got into such debt in the first place. Maybe you lost your job, maybe you are spending more than you are making, or perhaps you are just not paying your bills effectively and on time. Whatever the situation is, you need to know that your bad credit will not just fix itself.
You have to be willing to understand the mistakes that you are making and know to fix them. That being said, you are not alone, as many individuals are just waiting for their credit to magically repair itself.
Without the right assistance and proper techniques you could be waiting anywhere from seven to ten years before the blemishes get off your credit.
2) Job Prevention
Without a job you how do you ever expect to get out from under this mountain of debt? You can’t, and you would be surprised to learn how many employers are now starting to consider an individual’s credit score before hiring them.
This lets the company know just how worthy the individual is and if they can pay back their outstanding debts. Your bad credit blemishes could prevent you from landed the job of your dreams or the job that you need to start pulling yourself out of this debt.
3) Higher Interest Rates
A car and house are two things that you just simply can’t life without. Sure, you don’t have to go out and purchase a new home or car, but what are the chances that you can afford to pay a used car or home off in one fail swoop? You can’t, which means that you are going to need to get a loan in order to make the purchase.
According to https://www.bettercreditblog.org the worse your credit is, the harder it is going to be to procure that loan. In fact, you might not even be able to secure the loan at all and if you do you are going to be paying outrageous interest rates.
This not only means that you are spending more money over a longer period of time, but it is going to take you even longer to get out of this debt.
3) You Will Eventually Have To File Bankruptcy
If you don’t fix your bad debt there will come a time when the top blows off. You will either end up with your car and home getting repossessed living in the streets or you will have to turn to bankruptcy. While there is nothing wrong with bankruptcy, it can be extremely detrimental on your credit score.
Once again, a bankruptcy could prevent you from getting a job, securing a loan, or even forcing you to pay extremely high interest rates. Bankruptcy should always be your main last option, because it can stay on your credit report for ten years.
You really don’t want this type of negative blemish following you around for the next ten years, do you?
4) Higher Auto Insurance Rates
It is fact that some insurance companies will charge customers with low credit scores higher rates. Even though some insurers claim to be friendly to the consumers, it is not unusual for them to utilize this for their advantage. Most insurance companies base their home and auto insurance rates on a broad range of factors, including credit history.
If you just happen to have a low credit score and live outside Massachusetts, California and Hawaii, you may become prey to one of these greedy insurers. All other states permit insurers to charge customers with bad credit higher premiums on both home and auto insurance.