Why waiting is not the smartest things to do
Have you had a couple of problems with your credit and now on your report, there are some negative accounts listed on it? Derogatory information does not appear on your report until after seven years, and for this reason, you may decide to wait through that period before you repair your credit. Well, we put it to you today that waiting to repair your credit could cost you thousands of dollars. As a matter of fact, taking this approach could give you major issues.
- Legal Implications
For every debt you incur, you are legally liable for it. Even if the original creditor has charged the amount off, you still remain liable. The lending company has a statute of limitations in which they can take legal action against you for that account. You can get served with court action for the full amount you owe including the legal costs. The consequence is that you will go to court and still get a judgment against you that will reflect on your credit report.
- Financial Implications
Bad credit does not only stop you from getting credit cards; if you ever qualify for any loan or mortgage, you will get high-interest rates on them. If you register for vehicle or home insurance, insurance companies will give you high premiums. Some creditors might even put a lien on your bank account or wage garnishment if they win a judgment against you. The creditors will deduct money from your checking account or paycheck directly, and all of these could result in severe financial constraints for you if they happen at the wrong time.
- It could have effects on your career
Any individual that will work on a contract job with the government, you must have a security clearance, and if you have a significant amount in debts, you may be passed over for the job. Many financial services companies may also peruse your financial report before they will hire you. If you have too many collection accounts, it could be a case of financial irresponsibility on your part. The sad part of this is that you may be fully qualified for the job, but the fact that you decided to wait to repair your credit is the only reason you wouldn’t get the job.
- It could affect you personally
Having bad credit can affect you in so many ways, and it can go as far as affect your ability to find a home to rent. Landlords also check credit report so they can check your tenant-worthiness to see if you can afford the apartment. Every landlord wants a good tenant, and if you have many charged-off accounts, it could diminish the trust, and they will not consider you. Although this does not happen with individual landlords, it is common with properties that are managed professionally.
Waiting to repair your credit is never a good idea, and it will have some impact on you personally. It is better for you to be proactive about repairing your credit, and you will make life easier for yourself.
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