Do you know what all of the possible causes of bad credit are? There are many different things that can negatively affect your credit score. Make sure you know all of negative credit marks and how you can avoid them:
Late payments are probably the most common bad credit marks you'll find on a credit report. Typically there are different degrees of late payment, for example your score will go down more if you're 90 days late compared to being 30 days late.
Should you not pay on your mortgage, you may face foreclosure and be evicted from your home. Having a foreclosure on your credit report will almost certainly stop you from getting approved for any new home loans for at least several years.
Bankruptcy is usually the last resort for someone who cannot possibly pay back the debt they've accumulated. While it will help you get out debt, it will completely ruin your credit score for a very long time.
A judgment usually occurs when you do not pay a
creditor and they are forced to take action through the legal system. If a creditor successfully takes out a judgment against you, you'll likely have your wages garnished until you're paid off.
Repossessions may occur on any items you've financed, typically expensive things such as vehicles or furniture. If you cannot keep up with the payments for the item, your lender will take it and resell it.
An inquiry refers to anytime you apply for a new loan or line of credit. Obviously you're bound to have several of these on your credit report. However, they can slightly lower your score, especially if you make an abundance of inquiries.
A charge off occurs when a credit company decides to write off your debt as a loss when they do not believe that you will ever pay it back. While you may not have to pay back the debt, it will leave a negative mark on your credit report for seven years.
If you have any questions, please visit our Frequently Asked Questions page.