How Bad Can A Bad Credit Rating Be?
Having a bad credit rating can adverse repercussions than most people may think. On of the implications is that you will be required to pay higher interest rates than required. A bad credit rating will restrict you from living the life you have always wanted. Having a bad credit rating will make you be singled out by creditors and banks because you pose a lending risk. Most of these institutions view you as someone who will default in loan payment.
If they agree to provide you with a loan they will charge you high interest rates. They will also have an extra charge in case you default on payments through default fees, late fees and overdraft fees. When you have bad credit rating it translates to minimal credit score. The banks will use that score to evaluate the risk of lending you. Some companies will use credit ratings to hire employees.
Credit Cards – Getting a Joint Credit Card
When you are newly weds or it just you and an honest and trusted friend you can get a joint credit card. This is a credit card shared between two people. This can be a very good way to cut down the credit bill. Managing it is easy as you can split the card payment cost. For people living together like husband and wife they can share even the house bill and this can make it really easy to pay off any credit expenses. If one of you has bad credit you can create a good credit history when you share the credit card with someone with good credit history.
Sharing a credit card ensure that both of you get really low interest rates that you can not get with another type of credit card. However if the other person is not reliable in making credit payment then this can cause problems.
What Happens If You Don’t Pay Your Credit Card?
When applying for a credit card you and the credit card company agree on the time taken to pay the credit card. When you are not able to follow the company’s guideline, this may create problems between you and the credit company.
When your monthly credit card payment is delayed the credit company starts calling you to demand their money. They ask for you bank information to see if you are financially in a good position to pay them their money. Your credit card will be frozen and you would not be able to buy anything with it. However freezing your credit card does mean that interest rate will freeze the creditor will still raise them.
If the company knows you can’t pay them they will end up taking you to court. Many companies tend to avoid this option as its long so they will want to work out a paying plan with you.
What Happens When a Credit Card Company Sues You?
When you have huge debts from many different credit card companies and have no savings to pay off the debts these companies can take you to court. The main reason why a credit card company takes you to court is simply get their money back. You can prevent this if you can come up with an easily way to pay off the debt without involving the court. But if the company is not satisfied with the plan that you have come up with then that’s when they decide to take you to court.
Applying for a time order can be helpful when the company decides to sue you. This simply stops your debt from accruing more interest while you are waiting to go to court. The company will use Money Only Claim to sue you. When the court finds you guilty they freeze all your finances till you can pay the amount.
Credit Cards – Reasons to Lower Your Credit Limit
Having lower credit limit may make you sound like one of those stingy people who do not spend any money. With its many disadvantages and low credit limit it also has a brighter side. But with no credit offers and bad credits lowering your credit card limit can be the best idea ever. Debts are likely to accumulate if your credit limit is very high.
Most people find it very hard to limit themselves when shopping and end up buying more things or even things they do not need. With a lower limit credit card you still have the advantage of using a card and your spending is regulated by the credit company. This will ensure you don’t end up being bankrupt and help you pay out same debt. This is a good way to ensure that you save enough money for future use and after a while you can increase your credit limit if you wish.