How to Solve the Scariest Credit Problems

Written by Super User on . Posted in Learning Center

Are you in a challenging and troubling financial situation? Were you recently denied for a traditional bank loan due to a poor or limited credit history? Did you once have great credit but then ran into some trouble due to an immediate death, divorce, illness, or sudden job loss? There are plenty of reasons and causes for poor credit. Sometimes it’s easy to maintain good credit, while other times it isn’t, due to a series of unfortunate events or overspending.

Here are some of the most common situations that result in a poor credit score:

  1. Overspending. Just don’t do it. Everyone has a budget, no matter how large or small. Live within that budget and live within your means. You could have a bunch of credit cards to rely on for major or frequent purchases, but remember that those have to be paid off. If you have balances on five credit cards, then those can amount to some pretty hefty monthly payments, depending on the amount of each balance…not to mention the interest rates on each one.
    Once credit card balances and payments start to get out of control, then it is difficult for card holders and individuals to make regular, on time payments, racking up penalties, debt, and dings to your credit score.
  2. Divorce or Death. Neither situation is fun, and can cause huge financial hardships. Many people think that a spouse’s credit has nothing to do with a single individual’s. This is true to a certain extent. While both spouses have separate credit scores, any accounts, outstanding loans, credit cards, other open accounts, etc. that are held jointly can impact both parties’ credit scores.
    In the event a spouse becomes separated or divorced or passes away, the surviving spouse may be faced with a huge financial burden and responsibility, or may have a gap in his or her credit history if all accounts were in one single spouse’s name.
  3. Missing Payments or Defaults. Skipping, missing, or making late payments on a regular basis can sink any one’s credit score faster than the Titanic…even if your credit was perfect. Again, a combination of circumstances or situations can make paying one’s regular bills extremely difficult. After a long period of time of late or missed payments, you become high risk…which means your credit score is low or poor. Any loan that goes into default will result in the same thing.

Once an individual’s credit score drops below a certain level (typically a 500), it can make applying for a loan or another credit card incredibly difficult…if not impossible. This is because the applicant becomes high risk and therefore a liability to traditional lending institutions. Banks do not want to take the risk on lending money to an individual who is either struggling or cannot pay their bills.

So if one of the above situations has happened to you, and you are now in a position where you cannot seek out a personal loan to pay off your debt and catch up, what do you do? The perfect solution here is car title loans. Title loan companies do not require an applicant to have perfect credit history to apply for a title loan. Title loan companies solely require the title of a vehicle to hold as collateral until the title loan is paid in full. Working with a title loan company like Affordable Title Loanswill also ensure that individuals get a fair and flexible loan that allows for them to pay off the loan in full, pay off their debt, AND begin improving their credit history…all in one simple step.

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