When it comes to credit scores, nothing happens because of magic. Each and every decision concerning your credit affects your overall score. No matter your current knowledge about credit repair, if you think something is hurting your credit, it probably is.
Fortunately, there are always ways to seek credit repair and turn things around. Just like your credit score went down, it can go up again if you put in the efforts along with a good strategy. However, there are a few situations that you would wish to avoid at all costs. These situations could leave you feeling rather hopeless about your credit situation and affect you for several years to come.
Indeed, once something like a charge-off on an account show up it can really hurt your chances of getting back your good credit reputation in the near future. When you've omitted a payment for over six months, creditors resort to this as they consider the debt unlikely to be collected. On a credit report, these charge-offs can strongly contribute to the drop of your credit score. These represent bad news for future lenders, as you've shown to be strongly delinquent on some of the amounts that you owed. Try to settle these accounts by paying them in full (which will show on your credit report) or at the very least settle an agreement for a smaller amount (shown on the report as “settled”).
Debt collections could also show up to hurt your credit score. This is when a creditor seeks a third-party collection agency to get the sum that you owe. Another situation to avoid when considering credit repair.
Then, as we start heading towards the worse offenses when it comes to credit, we obviously have bankruptcy. A bankruptcy on your credit report will show would be lenders your incapability of properly dealing with credit in the past and turning things around. This information will remain on your report and negatively impact all your opportunities concerning credit. Reputation is everything when it comes to credit.
Foreclosure has a similar impact on your credit report with a seven year count. Foreclosure is when a lender puts your house into auction to recover as much as possible off your mortgage. Getting new credit will be even harder after that situation.
Next, when we have delinquent payments creditors can take you to court, which can impact your credit negatively as well. But more so court can allow creditors to move more quickly and aggressively to enforce collection by levying bank accounts and garnishing wages that will make paying your other bills that much harder. In any case, try not to reach a judgement in court, because even if you do everything that is said, it will stay on your case for seven years.
There’s more than one reason why you would want to seek credit repair before you run into these situations that stick to your credit report for long periods of time. Charge-offs, bankrupties, foreclosures, judgements and delinquent payments are all things you should work to keep off your credit report at all costs. Head into credit repair with the assistance of a professional if it’s imminent before the situation snow balls and one of these situations stresses you out.