It is not uncommon for people to see consumer being forced to kill their credit accounts by declaring bankruptcy. This is due to the fact that they have been consistently getting low credit scores, and was not able to deal it properly. Simply put, they actually mismanaged their financial obligations. Remember that people who spends by the credit is very vulnerable to financial mismanagement.
One of the primary reasons why consumers choose to spend by the credit is because of its convenience. Using credit cards in your expenditures actually enables you to spend without having to bring along cold cash in your wallet. In addition, using credit cards every time you spend gives you the chance of spending beyond the present cash that you actually have. However, this convenience has also lead consumers to mismanage their respective financial obligations, leading to much lower credit scores, and worse, eventual bankruptcy.
Therefore, it is important for you to know the right practices that you must keep in mind so that you will not fall to this trap. In the end, knowing the things that you must avoid every time you use your credit cards in spending may be the difference, especially when you want to have high credit scores, which saves your credit account from being killed in the process. Here then are 7 simple ways how to save your credit account from going into a miserable state:
1. Do not push your creditor to charge off your debt
Whenever you are not able to pay for your debt anymore, the natural thing for you to do is for you to default your payments. Whenever you are going to default your payments, most likely, your creditor will actually charge the amount to the insurance agencies as a loss. This charge is what credit bureaus call as a charge off. However, this case does not make you free from the after effects of not paying your debt altogether. In fact, the more charge offs that is listed in your credit report, the more chances that you are going to have a low credit score. This helps you kill your credit account.
2. Try your best not to default your respective debts
In addition, when you will default your debt, it will also adversely affects your credit report. Remember that debts that are defaulted actually have a larger impact to you having low credit scores as compared to late payments. And late payments actually carry 35 of your credit rating. In short, having your debt defaulted would surely bring your credit account down. Truly, it is still important for you to care minimizing unnecessary expenses.
3. Refrain from having your debt turned over to collection agencies
Usually, when you are a delinquent payer, most likely, your creditors will have to hire credit collection agencies to collect the debt from you. And having your credit report riddled with debt turned over to collections would actually cause much lower credit scores, signalling doom for your credit account.
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This article has been provided by http://www.free-credit-reports.com , where you can compare credit report and identity theft protection services with this comprehensive chart of all credit report and credit score service providers.
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