Credit and debt counseling has become a booming business over the last few decades..
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If you have amassed a rocky credit history and if you are burdened with a low credit score


General FAQs Regarding Bad Credit

If you are struggling with bad credit issues, you may be interested in understanding some basic information about bad credit and dealing with bad credit.  By understanding some basic facts about bad credit, you can be well on your way to dealing with and resolving bad credit.

The Relationship Between Your Credit History and Your Credit Score

Your credit history is the basis for your credit score, and is determined from a credit report. The report lists your credit history, such as what kinds of loans or credit you’ve had, whether you have had bad debt, your payment history, and the status of any existing loans or lines of credit. This tells a lender or credit card company whether they should extend their credit to you by giving them a good idea of what kind of risk you are.

Not All Old Debts Carry the Same Weight

If your primary goal is to better your bad credit history and better your bad credit score, you need to come to an understanding that not all past due or delinquent debts carry the same weight when it comes to your credit history and credit score.  When all is said and done, if you want to deal with a bad credit history and bad credit score, you will want to closely evaluate each of your old debts.  If you have old debts that are so old that they will soon be dropping off of your credit report, you will want to consider seriously not taking the time and making the effort (and spending your money) dealing with this debt. 


 


The Role of Risk Based Pricing in Your Bad Credit Loan

As alluded to a moment ago, risk based pricing plays a direct role when it comes to your ability to obtain a bad credit loan as well as the interest rate that you will pay on that bad credit loan.  Lenders determine that you pose a greater risk to them that you will default on your bad credit loan if you have a lower credit score and a poor credit history.  As a result, through risk based pricing, in order to offset the greater risk that the lender will face by lending to a person who has a bad credit history and a low credit score, a higher interest rate is attached to these loans.

The Importance of Disputing and Negotiating with Your Creditors

If you have bad credit and want to deal with the situation, it oftentimes is necessary to deal with erroneous information that can be found on your credit report.  In addition, in some situations bad credit is the result of charges on a credit account that really are not yours and similar types of problems.  Therefore, understanding how to dispute properly points of contention with a credit card company is vital.

In addition, another way of slowly working to improve bad credit in some circumstances is working to negotiate a settlement of an account with a creditor.  In more situations that you might imagine, you are likely to find a creditor that is willing to work out a settlement on an account with you rather than receive no money from you at all.