A bad credit score hurts you financially and personally, especially if you have a family to support. While it’s possible to recover and get a good credit standing, there exists opportunities you might miss out on during the wait. Debunk some of the myths about bad credit scores to lighten your load and improve your life simultaneously.
You’ve ruined your chances of getting a loan
Before you give up your dreams of living in an ideal place like Utah, it’s best to research your available loaning options. The truth is, not all lenders turn away people with bad credit scores.
While your chances have grown smaller since, you may find a willing lender by being strategic in your approach. One way of making sure your efforts will not go to waste is by targeting a reputable mortgage company. Negotiating only with a trustworthy company or organization reduces the chances of being scammed.
Credit counseling negatively affects your credit score
Credit counseling aims to educate people on how to handle their debts through budgeting and the use of different tools. The counselors help their clients to assess their current situation and draft a plan that will simplify the task of eliminating their debt altogether.
Some people avoid counseling because they believe it affects their FICO scores and therefore trims their chances of getting a loan. The credit score system, actually, overlooks credit counseling. The only way it influences application loans is if the individual lenders see it in your file and disapproves of it. Otherwise, chances are small that counseling will worsen a bad credit score.
Improve credit score by cancelling credit cards
Lenders have varied opinions about credit scores and the possession of numerous credit cards. Some people cancel their credit cards in the belief that doing so improves the lenders’ impression of them.
Before you follow this example, review your credit ratio utilization. Closing unutilized cards hurts your FICO score rather than helping it. This is because your total available credit decreases and as a result, increases the percentage of your total used credit.
Lenders care more about your ability to pay rather than the available credit you have. If you’ve been tempted to cancel credit cards, rethink your reasons. The same applies to receiving counseling and applying for loans. Handling your options strategically might just save your finances.