If you think all bad credit is created equal then you don't
understand the differences between credit card bad credit
and the other types of bad credit out there. How much of a
difference does it make? Believe it or not, quite a bit.
Some bad credit isn't too bad at all, while credit card bad
credit can prevent you from getting a car or a home. If you
want to understand why credit card bad credit is worse than
the other forms of bad credit, here are some things to keep
in mind.
1. Understand Your Credit Report
The first step in understanding the differences between
credit card bad credit and other types of bad credit is in
understanding your credit report and the information it
contains.
Your credit report consists of a multitude of facts
pertaining to your payment history. In addition to your
credit card activities, things like car loans, utility
bills and even unpaid medical bills show up on this report.
When a creditor looks at this report, they don't just see
whether you make your payments on time, they see if you've
ever been sued, claimed bankruptcy, let medical bills go,
etc.
2. Realize That Bad Things Happen to Good People
Let's say you work for ABC Bank. It is your job to approve
or deny mortgage applications. You have three applications
in front of you. Let's see who you would approve.
Applicant A has a credit rating of 595. This person has
paid their credit cards on time except for a period of one
month when two of her cards were 30 days late. There are
also quite a few unpaid hospital bills from this period,
but you have a note saying there is a dispute with the
insurance company and that is why the medical bills have
not been paid. Other than that, her credit looks clean.
This is general bad credit.
Now you look at the credit report from Applicant B. He's
also got a credit rating of 595, but he doesn't have unpaid
hospital bills. Just a bunch of late credit card payments
and a missed car payment or two. This is credit card bad
credit.
Now we're on to Applicant C. This person also has a credit
rating of 595, but she's maxed out all of her credit cards
and has been only making minimum monthly payments. She's
made a few late payments recently, and you have a feeling
it's because she's over-extended her credit. Again, it's a
case of credit card bad credit.
Who would you approve? Starting to see the picture?
3. Keep In Mind It's Not Bad Forever
So are you doomed if you have credit card bad credit? No.
However, you will be if you don't change your ways. You're
going to have to make your payments on time each and every
time for at least 6 months before your credit takes an
upward climb. Remember, credit card bad credit may be ugly
and it may be hard to get out of, but it's not the end of
your financial world.
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For more tips on bad credit credit cards, saving money and
avoiding getting taken, check out CreditCardTipsEtc.com, a
website that specializes in providing credit card tips,
advice and resources.
http://www.creditcardtipsetc.com/bad_credit_credit_cards/
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