Reasons Why You Become A Bad Debtor

A bad debtor is a person who does not pay his loans as required or as agreed between him and his creditor. Most people get their loans from established financial institutions while others go to back street lawn sharks and pay for such poor decisions. Granted that sometimes it is out of not fault of their own, but some people have found themselves on the wrong side of their creditors and paid dearly, pun not intended.

How do you degenerate from a credit worthy person to a bad debtor? Sometimes it is not out of malice, people just find themselves in this situations, this article is designed to expose where people go wrong so that you can rectify this trend and get back to a person people and institutions can give money too confidently.

Delinquency

Most people start here, they make purchases with their cards and do not make their payments on time and they forget about these purchases and keep on purchasing on different credit cards. This then amounts to lack of payments, herein referred to as delinquencies. When the payments are past due, they go to your permanent record such that in future when you ask for a loan, they will lower your credit score and lower the amount of loan you can be granted.

To avoid this, it is important to keep track of your purchases and take the date you are required to make the payments seriously so that you ensure there is money in the account on time. For delinquencies that already exist, you can pay them off and get your name cleared, though it is going to take time, you can always have access to no credit check payday loans.

Using Cards and checks to pay

When you use cash, instead of checks and credit cards, you use the resources you have at the time meaning that you can easily know when you do not have money. This cut down possibilities of using money you do not have and therefore reduces your chances of getting into bad debt. Using cash also allows you to stay within your budget.

Living beyond your means

Nobody likes to live a life of obscurity; therefore, the race is on for high living, the finest wines and the like. Many people emulate the lives of the rich and famous even when they do not have the means.

Many take credit cards from many companies and use them to fund their extravagant lifestyles until when the cards are declined and they start to wallow in debt. It is important to make sure that you live within your means, no matter what it looks like; living this way, ensures that you grow and your savings are not eaten away by debt.

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