Being conscious of how we spend our hard-earned money is something we all need to think about, however, the temptation to spend more than we have is often hard to avoid. If we are not careful, this can result in a bad credit report. Should this be a cause for concern?
On a daily basis, you may not experience too many ill effects from having bad credit. But what will happen when you want to make a large investment like purchasing a house? Could bad credit affect you then? Yes, it could. The reason is that if you try to apply for a loan, a lender will generally refer to your credit report to see how likely you are to repay the loan. They will look at how much debt you have and your history of paying your bills on time. Bad credit history could affect your approval for a loan.
If you have bad credit is there anything you can do to improve it? Yes, there is. To start with, make sure you pay all your bills within the given time frame. If you struggle to remember when a bill is due why not set up an automatic payment plan? Even if it is only to cover the minimum amount, it will help you to avoid costly late payment fees. You should also get rid of credit cards you no longer use. It is not enough to simply cut them up. You will need to call the credit card company and cancel the account.
Another helpful step you can take is to request a free copy of your credit report. You are entitled to a copy once a year, and it is a good way to look at your spending pattern and see the areas where you need to improve.
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