It’s obvious that we now live in a world of consumer credit and digital currency. With the explosion of crypto-currencies and all the new wireless payment methods, there are literally thousands of banks trying to extend people credit right now. The credit that you receive during your lifetime will range from a simple credit card, to a personal loan, student loan, mortgage, and auto loan. But specifically speaking about credit cards first, the number of people with credit card debt is rising faster every year (outstanding credit card debt topped $1 trillion at the end of 2016, according to a CNBC article). Many people can barely function without having a credit card in their wallet to swipe.
So what gives? Why have we become this way?
A lack of financial education and poor self discipline on the part of consumers is often the cause of severe credit situations like court judgements, bankruptcies, and loan defaults. Often, these financial "mistakes" make it difficult for consumers to get credit in the future as well. Before we go down this rabbit hole together, you may want to ask a simple question first; what exactly is credit anyway?
Being approved for "credit" simply means that you are getting an advanced form of payment to use for your own purposes during the course of normal life. You are then bound to this "credit grantor" by a contract tht says you will repay your debt in the future as agreed by the contract. If you vreabk this contract, then there are sever financial penalties. As previously mentioned, credit exists in lots of different forms, including loans, mortgages, and/or credit cards.
Before you can get approved for credit from a financial institution or lending agency, they will first check your credit history to determine your credit worthiness. Your credit worthiness is determined by how you have handled your financial obligations in the past. If you had a default on a loan prior to this application, or currently have bad credit history, you will find it difficult (though not entirely impossible) to get credit when you apply for it.
There is good news though. Even with a bad credit history, it IS possible for you to improve your credit history over time, or even build a new "good credit" history by repairing your credit. Credit repair is the process by which consumers with unfavorable credit histories attempt to re-establish their credit-worthiness going forward. This process of credit repair will help re-establish your credit-worthiness in the eyes of future lenders. Credit repair is a big business. It currently targets the 68 million Americans with a credit score lower than 601, in an attempt to sell them services. In case you were wondering, there are lots of credit repair companies that promise to repair your credit score for a fee each month, but if you can follow our simple guide, it’s possible for you to repair your credit on your own.
Repairing your credit will make it much easier for you to get low interest credit card transfers, auto, or home loans. With a poor credit rating, none of these things are impossible, but they will certainly be much more expensive. In fact, with a really poor credit score you may not even be able to get approved for a loan (or you could be subjected to some really high interest rates). In other words, it’s very important that you repair your credit now if you have a poor credit history.