Good Credit Or Bad Credit

By | April 7, 2014

good credit bad credit

It is important that you understand the meaning of good credit; it is possible that you can have good credit and bad credit; it depends how you use the credit and how well you pay the debts that you owe.

What is a good credit score

A good credit score is part of the information held in your name that demonstrates your ability to pay your debts. If you have a manageable amount of credit that, you are able to pay each month and on time then this will be constantly improving your credit score each month.

Having a good credit score will enable you to get more credit at a reasonable interest rate in the future. It demonstrates to the lending agencies that you are good with money and are able to pay your debts on time.

It proves that you are a low risk at not paying your debts and this is great news if you are looking to secure a loan in the future, including a mortgage.

What is bad credit

Bad credit; this is when you are having problems paying the bills and the money that you owe the company is spiralling out of control. You are no longer able to afford the monthly payments and this can put more pressure on you. It is often associated with high interest payments and the idea of paying off the debt looking more difficult as each month passes. These debts are often associated with store cards and pay day lenders; these loans are there and often appeal to those people who can least afford it and then become trapped in a cycle that they can’t find a way out of.

But there are options that you can try; it is a great idea if you are in this situation to look for help. There are charities that can and will help you work out what you need to do. Take advice and look for the solution, it will help you in the long run.

How to build good credit

If you are looking to build good credit then you need to have a plan. This allows you to plan in a way that is beneficial to your situation. But you need to be in control at all times of the situation.

To build your credit rating you need to consider the options open to you. The best choice is going to be a credit card; one that pays cash back is going to be a great option.

The aim of this card is to spend on it monthly, with the aim to pay the balance in full each month and on time. This allows you to maximize the benefits that you are getting, cash back and improving your credit score.

There are some great benefits of having a good credit score especially if you are looking for credit in the future. However, is it worth having the great credit score, as you get older? I have found that since I have a mortgage already and don’t intend to get any loans in the foreseeable future I have opted for the no credit way of life. It means that if I want something I have to save up for it, and often the need disappears. So now, my credit score isn’t that great, but then I don’t really have the need for a great credit score. I am happy with the no debt philosophy that I am currently living, and don’t intend to change my ways for the time being at least.

 

 

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