How Much Of A Problem Is Bad Credit?

A bad credit problem is a situation in which an individual has a negative history of making payments on accounts that are reported to credit bureaus. Bad credit can result from a number of different causes and it can have impacts that are rather far reaching in life.

What Defines A Bad Credit Problem?

Some of the big issues that mar people’s credit scores and history include:

  • Failure to pay on credit cards and other accounts

  • Repossession of vehicles and/or other secured purchases

  • Foreclosure

  • Bankruptcy

A bad credit problem can also result when a person has an extremely high debt to income ratio. Even if personal bank accounts show positive balances, anticipated monthly bills can count against a consumer.

Areas Where a Bad Credit Problem Can Impact a Consumer

When an individual has a bad credit problem, the effects can ripple throughout life. A bad credit problem can hamper a person’s ability to:

  • Take out a loan

  • Get a new car

  • Rent a property

  • Get a job

A bad credit problem can mean that a consumer is a big risk to banks and other lenders. Even if banking insurance is in place, lenders may not wish to take on that risk. It is possible to clean up a bad credit problem, but it can take time and diligence to ensure outstanding accounts are paid up to date and debt versus income levels are stable.

 

 



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