|
|
Is A Bad Credit Rating A Good Thing?
A bad credit rating save you from bigger difficulties? Hasn't it done just that for many young people? I will explain it with few true stories.
Is It Good To Have A Good Credit Rating
My friend started his adult years with good credit. Soon he was able to get credit cards at will, as well as finance cars, snowmobiles and more. He made the payments, and went deeper and deeper into debt while he was at it. When he was thirty years old, he had over $20,000 in credit card debt, plus loans on cars and business tools.
He was overwhelmed with the debt. After considering bankruptcy, he was convinced that the credit card companies would reduce his balance due if he just threatened to declare bankruptcy. However, he had to stop paying on the cards, or the credit card companies wouldn't believe he was in financial trouble. He did this, and then drafted a nice letter to the companies, explaining his situation. Most of the companies cut thirty percent off what he has to pay, but he had to pay the remaining balances immediately, which he did with a home equity loan.
As a result he was able to rebuild his credit score as his bad credit rating was not as bad as if he had actually declared bankruptcy. He also started to building again his credit balances. His good credit rating enabled him to again start the process of overloading himself with debt. He lives a stressful life, to say the least.
Story Of A Bad credit Rating
Another friend had her first credit score based on the phone bill in her first apartment, which she never paid on time. It was ultimately disconnected. At an early age this and some other small credit infringements, destroyed her credit scores. What effect did it had on her?
Well, because she can't borrow, she has not had the pleasure of being overwhelmed with debt and at the edge of bankruptcy. She has to buy things for cash when she has it, or wait until she saves enough. She cannot buy anything on credit till she do not have the cash to buy but it is good for her as she will never be under the stress of paying debt? No that is not true.
She seems delighted than most people, perhaps partly because she just does not have the debt-stress that is so typical today.
Bad Credit Rating Can Be A Good Thing?
I'm not saying you should intentionally try to get a bad credit rating, but if you already have one, know that it is not all bad. The habits that got you here could get you into even more trouble if you could borrow more. Take it as an opportunity to stop going further into debt, and a chance to learn better habits?
If you want to buy something then buy it for cash. Your first priority should be to pay those outstanding balance having the higher interest. The moment you get your cards paid off, start setting aside money to buy a good used car for cash. then, when you have done that, start putting what would have been a car payment into a savings account, for a future down payment on house or a business (the only things you should borrow for). Your bad credit rating can be a good thing if you take it as a chance and learn a lesson from it.
About the Author Here's How to Become a Millionaire The Guaranteed, No Risk Way. From Debt to Wealth
|
 |
Please Rate: |
|
Rating: |
 Processing ... |
(Average: Not rated) |
| Views: | 19 | |
|
| More Articles from Personal Finance | | |
| Top Articles in Personal Finance | | |
|
