What Is Bad Credit Exactly?

  • 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:

  • Time
  • 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.