Low Credit Scores

Sadly today in the US your credit score dictates alot of what you can and cant do not only in your financial life but in your personal life. Having a low credit score can stop you from buying a car, obtaining a mortgage, getting into an apartment, and even sometimes makes a difference in who will and will not employ you. These days employers are even looking into your credit score as a means to find out how trustworthy and reliable you are. When it comes to buying houses, cars, furniture or just about anything having a lower credit score will automatically result in your having a higher interest rate and you paying MORE money where as someone with a higher credit score would have a lower interest rate and a lower payment. One of the best ideas for someone with a low credit score is to begin trying to repair their credit before trying to buy a house or car. Most people believe that the best way to do this would be to pay OFF their credit cards, but actually this is incorrect. First, you want to keep your credit cards open, but you want to try to keep them right around having a debt of 33% on them. When you close the account out then the card will no longer appear on your credit score as an open trade line. Most banks want to see no less than three open trades lines. Another way to repair your credit is to pay OFF any outstanding collections of any sort. Once these are paid off, after a certain number of years they will fall off your report aand no longer appear. Having a mishap that results in your credit score or FICO being damaged isnt the end of the world. But it can feel like it sometimes. One of the most important things to NOT do is to file bankruptcy. This option is only for those that see no light at the end of the tunnel, such as someone whos business has gone under or someone that engaged in a bad business deal. Once you file for bankruptcy it becomes basically impossible to obtain a mortgage or loan from anyone for the next seven years.

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