A credit report is a very important document. It is considered the most credible document that depicts the status of your financial stability. Your employers, lenders, and anyone else, with whom you are dealing, uses your credit report in determining how creditworthy you are.
A credit report is also useful for consumers in determining their credit score. The report helps them assess their financial status and how they may respond to offers of new lines of credit. If their credit report is good, then consumers can be confident that they can apply and qualify for loans, such as payday cash advances, that have some very good deals. But if the credit report shows the opposite, then they have to be very careful when dealing with lenders in order not to be taken advantage of.
If you have a good credit report, many lenders will work with you. Lenders will offer you good deals and rates. Employers will readily hire you. Banks will give you better loans with favorable terms. Hence, a good credit report opens greater doors of opportunities to consumers.
It is therefore important to get rid of things that can ruin your credit report. What are they? Here are some of them:
· Charged-Off and Noncollectable Status
When you have stop paying your loans, such as payday cash advances, and other credit accounts for more than 6 months, you are given by your lender an uncollectible status. This will be reflected on your credit report as a charged-off account and will remain on the report for approximately 7 years. Resulting in 7 years of difficulty getting approved on loan applications, and worse, employment.
So, it is important that you make timely payments. In the case of defaults, do not leave it unpaid, but find ways to negotiate with your lender. Therefore, it is necessary to borrow only an amount you can readily afford to repay in order to avoid payment default complications which may ruin your credit rating.
· Unpaid Accounts Turned over to Collection Agencies
When creditors are unable to collect the money you owe them, they usually hire collection agencies to collect your payment and totally turn your account over to them. The problem with collection agencies is that they can contact the 3 main credit bureaus and place an “in collection” status on your credit report. If this happens, there will be a negative impact on your credit report and the depressing consequences that follow.
· Judgments or Lawsuits Filed Against a Consumer
If a consumer fails to pay or settle his account with his creditor, the latter can file a lawsuit against the former after all means of trying to collect has been done. If there is a judgment, this will be reflected on your credit report and will remain there for 7 long years starting on the date when the lawsuit was filed. As mentioned, this will create complications on business deals, loan applications, and even employment.
· Non-payment of Tax Liens and Foreclosure
Non-payment of tax liens will produce a negative impact on your credit report. Entries of unpaid taxes remain in your credit report for 15 years. In addition, if you are unable to pay the taxes, your property, will be seized by the government and put in foreclosure. Defaults on mortgage loans can severely damage your credit score.
· Filing of Bankruptcy
Filing bankruptcy can have a negative impact on your credit report and will be noted on it for the next 7 years. Usually, a bankruptcy entry on your credit report will reduce your chances of getting good deals on loans, although payday advance lenders will still work with you.
Protect your credit report from these terrible things by being credit worthy.