2. Poor Credit Doesn't Happen Overnight
Your credit score is calculated through a number of different factors.
Over time, your score will become higher or lower depending on how
well you are able to address the following criteria:
– Credit Utilization
– Payment History
– Types of Credit
– Credit Inquiries
– Delinquencies, Collections, and Bankruptcy
The following slides will provide information on what can lower your
credit score, and how you can start rebuilding.
3. Missing a Payment
Even if you can only pay the minimum, it's extremely important to make
regular payments every month.
One missed payment of just 30 days can affect your credit score.
It takes 7 years for a missed payment to be removed from your credit
report.
4. Allowing an Account to Go to Collections
If you stop making payments altogether, your
account might go into collections.
Eventually, the debt could get assigned or
sold to a debt collection agency.
A delinquent account will be on your credit
report for 7 years as well.
5. Keeping a High Balance
Credit utilization is an incredibly important factor in determining your
credit score.
If you have high balances on all of your cards, creditors will question
your ability to pay back your debt.
High credit utilization is anything over 30% of your total credit.
6. Applying for Several Lines of Credit in a Short Period of Time
This is a red flag for creditors.
It could be a sign that you have unsteady finances and are looking for a
quick solution.
Applying for more credit just to improve your credit utilization might not
be the best idea.
7. How Can You Amend Poor Credit Mistakes
• Request your Credit Report. Make sure
there aren't any errors.
• Create a budget.
• Sign up for automatic bill pay.
• Apply for second chance credit cards to
rebuild credit.
• Work with debt collectors to settle any
open delinquent accounts.
8. Learn how to make sound personal
finance decisions with OneUnited Bank
877-663-8648
100 Franklin Street. Boston, MA 02110