Basically, your credit history is important because lenders, insurers, employers, and others may use it to assess how you manage financial responsibilities. So we’re telling you that if you have a negative credit history, you could be without insurance or utilities, unemployed and can be even homeless. Now, do you understand how important it is to have a positive credit history? Since it is so important, please remember the following about the importance of credit history:
- The credit score determines your ability to obtain credit; you’ll need a good credit score in order to qualify for credit cards giving attractive offers.
- While the history is searched, they’ll be able to find the interest rate that which you are capable of repaying. Getting an insight of the responsibility you can handle.
- A good credit score means you’ve shown yourself to be a financially responsible individual. It shows you’ve enhanced borrowing capacity, thus increasing your limits. It can fetch you easier approvals of rentals and apartments and even can play a role in finding a good job.
Here are few tips from our site to improve your credit score, there by which you can get back into your normal financial status.
Put an end to creating more debts: This won’t get you out of debt, but at least your debt won’t get worse. When you continue adding debt while you’re paying it off, you won’t make much progress, if you make any progress at all. Reduce your temptation to create more debt by cutting up your credit cards.
Increasing payments can do wonders: if you’re only paying the minimum on your debts, it will take the longest time to get out of debt. By the time you finally pay off your balance with minimum payments, you’ll probably have paid double or even triple what you originally charged.
Make a plan: The more you put toward your debt, the faster you can pay your debt off for good. If you don’t already have one, create a monthly budget to better manage your money and possibly help you figure out how you cut out some expenses and use that money for your debt.
Cash out retirement funds or insurance policies: You may consider pulling money from your retirement account to pay off your debt. Beware; if you’re not eligible for that, you’ll face early withdrawal penalties and additional tax liability if you withdraw money from certain retirement plans. You may have accumulated some cash in your whole or universal life insurance policy that you can put toward your debt. Be careful though, some withdrawals have tax consequences.
Our site includes various steps in improving credit score; do visit to get to know more.