Everyone needs a good credit score. No one wants to pay higher interest rates. But still most of the people end up having a credit score lower than expectation. Let us see what disadvantages a bad credit score gets us.

Disadvantages of a bad credit score :Depression

  • Fees: some creditors may charge additional fees to the individual with a bad credit score in order to give them a loan. However no such fee exists, but it may be accessed against both the secured and unsecured types of credit.
  • Lost Opportunities: credit reports are used as a standard while hiring for a company post. Employers often relate a bad credit report which has late fees with a weak attitude of the person towards work.
  • Sub Prime loans: this is the loan offered when the prime loan is not allotted. It is usually at a higher rate of interest which is again a disadvantage to the user.
  • Higher Premiums: Research has shown that the FICO scores are directly related to the insurance premiums. Many companies see the credit reports as a measure of person’s ability.
  • Increased Problems: Research has shown that most of the family issues are today regarding financial issues. A Bad Credit report is a major one amongst them.

The Seven Point Strategy on “How to improve My Credit Score?”

  1. Use your cards wisely in order to avoid any future use of credit accumulation.
  2. Pay down on your credit cards as this certainly helps raise your credit score. It is advisable that you use less than 30% of your credit limit in order to be in the good books.
  3. Use your older credit cards once in order to keep them healthy, since these numbers are based on consistency and history.
  4. Get in touch with the collection agencies and check for your reports and bad debts. You need to clear out your negative accounts in order to move ahead.
  5. Add accounts which have perfect payment history to your credit files. This will give a steep rise to your credit score.
  6. It is not advisable to close your older credit accounts even if they have not been used for long. You can keep them active and later on add in your file.
  7. Finally you should avoid filing for any new credit, in case you have to, Be careful of the credit limits the account offers.