Credit Problems

Written by Serena Berger
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Credit problems can have a number of different causes, and a variety of bothersome consequences. In our world today, it is necessary to get loans to do many things that you need or want to do: go to college, get a car, and buy a home, in particular. If you have a bad credit history and no savings, you will find it virtually impossible to get these long term loans, so you need to do everything you can to protect your credit history.

Avoiding Credit Problems

The first thing you have to do is pay all of your bills on time. When you have utilities in your name, those bills have to be paid promptly and consistently. When you get your first credit cards, they are likely to have a relatively low credit limit. To avoid credit problems, it's important not to abuse credit and make sure you can always handle the monthly payments.

Sometimes that may mean making the minimum payment, while other times you should be able to pay the maximum. While utility companies may give you a little leeway before adversely affecting your credit rating, credit card companies are likely to act more quickly and put black marks on your credit rating which will make it hard for you to get loans or higher credit limits in the future. The worst case scenario for abusing credit is having to declare bankruptcy, which is likely to prevent you from being able to get any kind of unsecured loan or credit line for up to ten years.

Some credit problems aren't even your fault, but can still have dire consequences. Identity theft is increasingly common, and someone can open credit cards in your name, spend them to the limit, and then not pay the bills without your ever knowing. It is important to check into your own credit rating periodically to make certain that this isn't happening to you so that when you need to get a loan, you aren't surprised by a denial when you thought you had a solid credit history.

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