Foreclosures, bankruptcies, and losses by credit card companies for non-payment of your bills will have an obvious negative impact on your credit score. There are numerous other matters that are taken into consideration by credit agencies concerning credit scores.
Making Minimum Payments on Your Bills
Creditors make a lot of money from consumers who make minimum payments on their credit card bills. However, making minimum payments can have a negative impact on your credit score. Nessa Fedis, the Vice President of The American Bankers Association, states “it suggests you’re under financial stress.” Try to pay more than the minimum amount on your credit card bills. Minimum payments can be interpreted that you’re in financial difficulty.
Co-signing
A friend, family member or child may require you to guarantee their debt. When you co-sign for their debt, their entire debt appears on your credit report. The debt will be considered yours. If the primary obligore under the agreement misses payments or makes late payments, it will have a negative affect on the credit score of the co-signer.
Short Sale of Real Estate
A short sale takes place when the bank agrees to allow the sale of a residence they have a mortgage on for less than the amount due and owing on the mortgage. This causes the financial institution to lose money. This will have a negative impact on your credit score. You should negotiate with the lender prior to the short sale. It is important you request that the lender not report that you paid less than the balance due and owing to the credit agency. If they report to the credit agency that you paid less than the balance due on the note and mortgage, it will have a significant negative impact on your credit score.
Numerous Inquires
When you apply for credit with a lender or other institution, an inquiry is made against your credit report. When the credit agency sees numerous inquiries, your credit score is impacted in a negative manner.
Having good credit is important if you seek to buy a house, obtain credit cards, lease a car or engage in other financial transactions.
Foreclosure and bankruptcy have a significant negative impact on credit scoring. Bankruptcy can act as an escape valve to prevent the loss of a home, stop foreclosure, eliminate a second mortgage and stop debt collection harassment. Your credit can be re-established after filing either a Chapter 7 or a Chapter 13 bankruptcy One bankruptcy myth is that you will never receive credit again after filing bankruptcy. This is simply untrue.
Should you have questions or issues concerning your financial situation or are considering filing for bankruptcy, feel free to call the Law Offices of Schlissel DeCorpo. We’ve been helping our clients for more than 45 years deal with foreclosure defense and bankruptcy matters. We can be reached at 1-80–344-6431, 516-561-6645 or 718-350- 2802.
