As mentioned in some of our other blog posts, there are a number of strategies you can employ to achieve a high credit score. This score has an effect on many processes important to consumers, from getting approved for a credit card to getting a good rate on a mortgage.
However, life tends to be unpredictable, and the reality is that sometimes we stumble on our trip to that perfect score. Often, knowledge is the greatest form of preparation — by being aware of the factors which can cause a credit score to drop, you can be proactive in avoiding or recovering from these pitfalls. And remember: with bad credit financing via flexible lease-purchase options at Okinus, a less-than-stellar credit score doesn’t have to stop you from getting the furniture, appliances, and electronics you need.
- Involvement of debt collectors
We all try to make payments on debts in the amount of time we are given. Sometimes, unfortunately, we forget about a debt, or are not able to allocate the needed funds in time. When this happens, debt collectors often get involved. When a collection agency is hired or purchases your delinquent debt, they report that the debt is in collection. When this happens, your score drops; the precise amount of damage to your score depends on your initial credit score. A higher score will fall more dramatically, while a lower score will be less affected.
- Failure to make credit card payments on time
Nothing can sink a credit score like late payments. When credit card debt builds up, it can get more and more difficult to make payments on time. This is a common problem — a whopping 157 million Americans have some amount of credit card debt. These late payments are weighted very heavily in a credit score; 35% of your credit score is based on credit history alone. Thus, paying your monthly credit card bill on time is essential for rebuilding credit.
- Unpaid court judgments
If you receive a court judgment, it is essential to pay it as soon as possible. An unpaid judgment has consequences beyond the judicial system — judgments get checked by creditors as well, as they are another form of debt.
If you need to finance some large purchases of household items, but you have a credit score that is lower than you would like, don’t worry. With the flexible lease-purchase bad credit financing options available at Okinus, you can buy the appliances you need regardless of your credit score. Try out the furniture financing calculator today — you will be impressed by the rates available with bad credit financing.