Why Knowing Your Credit Score Can Save You From Bankruptcy

A copy of your credit score is a great way to know if you are in debt or not. Many people don't keep track of their credit score and end up in deep debt. Your credit score will be affected if you default on a payment or are late with payments. Credit scores are used by lenders and creditors to determine how trustable you are to repay your loans and/or purchase credit. Creditors are less likely to approve you for credit if your credit score is lower. This shows that you are more risky.

Creditors have computers that can report your credit history and transactions, including bill paying, credit card payments and missed or skipped payments.

Your score will drop the more you make late payments. An average person starts with a credit score around 800. As you miss or skip payments, your credit score drops. A lot of people file bankruptcy when their credit score reaches 500. These creditors will be paid in full when they file bankruptcy.

However, the bankruptcy remains on your credit report. One type of debt bankruptcy won't clear is money owed to the government, such as student loans or taxes. This is not a reason to file for bankruptcy. It is important to keep track of your credit score these days as it can fall faster than you might think. You can keep your credit score under 500 and prevent it from falling to dangerous levels. This will save you a lot of money later, such as when you are looking to purchase a house. Your credit score should be at least 700. However, 650 is acceptable.

If you want to get a copy of your credit score, you can visit http://www.equifax.com and use the credit report to get your credit back to where it should be. For all the reasons I listed above, your credit score is the best way to avoid bankruptcy. If you were able to avoid bankruptcy, why wouldn't you obtain a copy your credit score? If you have all your credit issues resolved before bankruptcy, it is almost impossible to file for bankruptcy.

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Thursday, 18 July 2024

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