3. Not paying your debts or declaring bankruptcy
The worst thing you can possibly do for your credit rating is to not pay your debts. If you don’t pay what you owe now, then who will want to lend you money in the future? When you don’t make payments on your debts, that information is recorded on your credit report for 6 - 7 years. The longer you go without making payments, the worse it looks on your credit report. If you go a long enough time without making your normal payments, a creditor will finally send your debt to a collection agency. This will further impact your credit rating. If this has happened to you, your credit cannot be "fixed," but you can begin the process of re-establishing your credit by doing the right things.
Filing for bankruptcy will also destroy your credit rating. Bankruptcy actually impacts a lot more than just your credit rating. This is why people should not enter into it lightly, but as far as your credit rating goes, it will sink your boat every time. Credit can be re-established after bankruptcy, but it takes time – it’s not as easy as you might have heard.
If you have destroyed your credit rating or if you are on this path and you want to re-establish your credit, you need to know all of your options so that you can make the best choices for your situation. We are a non-profit service, and we are here to help give you honest answers and information.
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