How Your Credit Score Can Be Affected
Debt, something that someone borrows and should be returned. The most common types of debts are money since its a necessity for human survival. Although it’s available it shouldn’t be taken as free, because of the fact that debts that are owed need to be returned. Otherwise, there are repercussions over it. Unless its a personal debt from people that are closest to you, they can forgive you for that, but if it’s from financial institutions, non-payment is serious.
There’s a good reason why you should pay your debt, and that is because not paying on time will affect your financial status. Each person has what you call as a credit score. If you’re responsible enough then your credit score will go up and if you’re not, it will go down. Financially lesser credit score will give you lesser access to financial institutions lending you. So how does one’s credit score be affected?
Debt late payment: Aside from maxing out your credit card (which is not debt related by the way). One should avoid late payments. Aside from late payment fees, if you don’t pay your debt on time, you will also be reported for late-payment. Usually its 2 weeks of non-payment that you will be reported, this is on top of daily phone calls from the financial institution that you owed money from. Non-payment will affect your credit score, which will be a factor when you opt for a loan in the future (the bank remembers).
Debt non-payment: If late payment is bad, non-payment is even worse. Why? Because aside from your debts piling up, you will also get more extensive calls, reports, and a lower credit score because of it. Non-payment for some lending firms are a no-no. If you plan to lend in the future you should already expect that most will decline your application, unless you can offer collateral.
Don’t run away from it: You should know that running away from your debt is not an option. Because the people that you owe your debt from will surely come after you and that is something that you really should take very seriously, especially if you’re debt as collateral. That’s why if you need something, ask your family and friends first before the institutions that make it their business to offer debt to you.
There’s a good reason why many p[people are in debt and while some are valid, some aren’t Regardless though, the fact of the matter is that ones owe someone a debt and that should be paid. If you wish to know more about debt management and how to be debt free, have a peek at this site.