- Bankruptcy: A legal declaration of your inability to pay debts to creditors
- Charge off: A creditor’s decision to give up on recovering debt you owe because you’re unable to pay
- Collection action: A creditor’s decision to sell or outsource the collection of your debt to a debt collection agency
- Wage garnishment: A process in which a creditor obtains, through a court order, the right to take part of your salary directly from your employer in order to make up any payments you may owe
- Tax lien: A government claim on your property for the amount of unpaid state or federal taxes
- Foreclosure: A legal process in which the grantor of a mortgage takes possession of and sells the mortgaged property after the borrower fails to make the required mortgage payments
- Repossession: The forced surrender of property following a borrower’s failure to make payments
What to do if YOU have bad credit?
There are two main cures for bad credit:
- Timely payments
Credit scoring models are more interested in the recent than in the distant past and if you have bad credit from more than 5 years ago, there isn’t a lot you can do about changing it. Time will eventually remove it from consideration.
Timely payments can do a great deal to improve your credit ratings. Making on time payments is the BEST way to dig yourself out of a bad credit hole. Sometimes, however, we need help. I personally used a credit counseling service back 16 years ago and it was the best decision I ever made.
If you’ve realized that you’re in over your head and need some help sorting things out, consider trying GoLookOnline.com. There you can get a free credit repair consultation and get coaching to help you learn how to raise your credit score. Some people have reported a 100 point gain. Though your results may not match those, getting help is sometimes the best first step in turning things around.