Your credit decisions may be affected by the financial crisis. Losing your job, personal issues, or poor financial decisions, can lead to you having a bad score on your credit. Such circumstances are often unavoidable due to changing priorities and needs.
Dealing with Difficult Times
If the value of your home goes below your debts on a mortgage, it’s likely you’ll give priority to your credit card payments, which can result in poor credit scores. Late or missed payments are a sure way to reduce your scores.
Cash vs. Credit
Missing payments is a common symptom of financial problems. Putting an account in collections will also affect your credit score greatly. Unfortunately, the more problems you have with your finances, the more you’ll likely need a good credit score. Your daily needs and resources suffer from a poor economic situation, leading to your credit card being strained.
Lenders are much more cautious during an economic crisis. They usually ignore your monthly income and rely only on your credit scores for discerning your ability to pay. Fortunately, lenders are beginning to once again take into account your income. They check how well you manage your finances and may give you a bad credit car loan if your ability to budget your income is above your credit score.
In Atlantic Canada, we do our best to improve your score and build a new credit history. It’s best you remember this and act now by maintaining a good accounts mix, using credit cards with care, and making payments on time.
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