No Credit Vs. Bad Credit
There are really only two important factors that will make it so difficult to get good credit: bad credit and no credit. While it is generally believed that both of these credit positions are synonymous, this isn t always an accurate assumption. In reality, there are many different ways that bad credit can rear its ugly head. This means that regardless of what your credit score may currently be, you will need to find a way to increase your credit score in order to get good credit. In this article we will explain the difference between no credit vs. bad credit.
One of the most effective ways to increase your credit score is to begin to pay your bills on time. Even if you are dealing with the problem of past-due collection accounts, you should still attempt to make every payment on time. Many people who have a large amount of debt from collection accounts have become so accustomed to bouncing checks that they actually begin to feel like it is a way of life rather than a problem. While you are working to correct any issues with these collection accounts, make sure that you don’t end up further into debt by starting to carry credit card balances.
If you do end up having a collection account listed on your credit report, the most important question you should ask is whether or not you want to remove it. There are many points to consider here, and your decision will be based upon whether or not you want to trust your credit score to a third party organization, and/or whether or not you want to trust yourself to make the right decision. Many people are comfortable placing a collection account on their credit report, but others (such as businesses) would prefer that the account be removed altogether. While neither choice is necessarily ideal, it is important to understand how each decision will affect your overall credit score. Once you have made the decision to remove the collection account, you must then get in touch with the credit bureaus to explain the reasons why.
On the one hand, removing a No Credit Vs. Bad Credit scenario means you are taking control of your own finances. Without a good credit history, you cannot get loans or credit cards. Your chances of landing a job are reduced greatly if your credit history is bad. While you can improve your credit history by making payments on time, if you are unable to do so, your score will remain low. By successfully completing your payments on time and being active in managing your debt, you can quickly raise your credit score and regain control over your finances.
On the other hand, removing a No Credit Vs. Bad Credit scenario means you are relying on someone else’s credit history to get you through life. When you apply for a car loan, a mortgage, or a line of credit, you are essentially putting your life and your finances on the shoulders of someone else. If you have poor credit, your application will be denied. Even when you are approved, the interest rates will be high. While bad credit lenders do charge higher interest rates on poor credit borrowers, the alternative is worse: living with bad credit, avoiding important purchases, and foregoing the chance to enjoy better credit in the future. By completing your loan payments on time and proving that you are financially responsible, you can quickly improve your credit score and begin making responsible purchases in the future.
The first step in No Credit Vs. Bad Credit is to request a copy of your credit score from all three of the major credit reporting bureaus: Trans Union, Experian, and Equifax. Once you have obtained this report, examine each of the reports carefully. Look for errors or missing information. If you find errors, contact the reporting agency immediately to notify them of the error and to have the error corrected. Review the credit score, any letters regarding disputes made against you, and any court actions or judgments. To avoid some of these difficult steps contact us today to walk you through this process.