Negative credit or bad credit is the situation that a person finds themselves in when they fail to repay a debt or a loan on time that they had taken from some money lending institution or a bank. The credit history thus gets tainted and the person faces a lot of problems in acquiring a loan again in the future lest the bad credit is taken care of immediately. There are many ways in which one can proceed to deal with this situation and one of the most effective methods followed all over the world is debt consolidation.
The basic principle of debt consolidation is that all your outstanding dues are converted into a single lump sum debt and then a loan is taken against that due and that loan is cleared at a relatively slower pace and at a lower rate of interest as well. This is one sure shot way of improving the credit history and takes care of the tricky bad credit provided you pay the interest amount on time.
In today’s world, e-payment is the best way to pay for many. It allows you to shop cashless and therefore you are freed from the burden of carry around cash. The best way to make payments or shop without cash is to use a credit card.
If you are a credit card holder and want to know what report means and how you credit report stands then we suggest you to go through the following points-
1) It is a report about your credit history and is generally prepared by the credit bureau.
2) The analysis of your credit repost shows your creditworthiness, i.e., how well you deal with your creditors etc.
3) This analysis gives detailed information about when you opened your credit account. How have you paid back your creditors in recent history and the latest enquires made by you. It also lists the total number of payments you have made.
A foreclosure should only be considered as the last resort for it can drastically affect your credit rating. In fact, a foreclosure can affect your credit score by about 200 to 300 points. This means that a credit score of 800 can be lowered to 500. This results in a negative credit score. After a foreclosure, it is mandatory that you should not receive any financing from a creditor. This means that you will not be able to get loans, buy a car or any financing.
Your low credit rating may also affect your ability to get an apartment as most landlords use your credit scores as a way to determine your reliability as a tenant. This also applies to getting phone numbers or cable. However, these detrimental effects can be reversed only after the 24 months are over but a foreclosure will only be fully removed after seven years.