With Experian reporting that the majority of consumers fall into the “fair” range as far as credit scores are concerned, it is the categories below it that take on the most flack. Consumers who happen to fall into these categories are either in some sort of financial dilemma or trying to get out of it. However, there may be light at the end of the tunnel for these consumers, as a few unknown facts about bad debt is uncovered.
A Bad Credit Record Indicates A Lack of Willingness To Pay
One of the reasons customers with poor or bad credit scores are rejected for further finance is because of the assumption that they are unwilling to manage their payments. With the changes brought about by the global financial distress of 2008 and the abrupt decision-making that led to Brexit, consumers were left without jobs. For many, their savings ran out in a matter of months and they were simply left without funds.
The Lender Is Always Right
There are a few occasions where lenders simply aren’t the only ones covered by their odious terms and conditions. A review of the company, Lexington Law reveals quite the opposite. They, along with companies such as Sky Blue Credit and Credit Repair reveal rights consumers might not even have been aware of to try and clear their names. Terms and conditions that are in place can never go against consumers rights.
Once Bad Debt Is Paid Off, The Bureaus Are Clear
Unfortunately, this is not only true, it is also misleading. Consumers who believe they will be able to apply for finance the day after they pay off the last of their bad debt will find the opposite to be true. Credit bureaus track payments over a period of time. While many see an increase in their score from around the sixth month, the payment profile stretches over a period of up to two years. It can take up to six years to clear a credit record.
Lenders Won’t Touch You
Many lenders realize that the bad debt situation of many of their clients is not due to reckless credit behaviour. Unemployment, illness, and a host of other things can contribute to bad credit. For this reason, some banks offer secured lending. This mitigates their risk and also provides the customers with an opportunity to remedy their situation.
Thankfully bad credit no longer sees consumers go to prison, however, lack of access to certain services may seem a like a prison on its own. Consumers are recommended to work hard at clearing their credit scores and to start implementing remedial steps immediately. This is a situation that even the most frugal and careful spenders may have to face.