Increasing access to credit allows a person to have more than one credit at the same time. These days, there are credit providers who dare to provide credit without conducting credit score checking. This often results in someone having bad credit. When someone has been hit by bad credit, the likelihood of the borrower being unable to pay credit is very high, as a result, you will be called by debt collectors over and over again. Therefore, you must avoid having bad credit and try your best to reach not just the safe, but the highest possible credit score.
So, to avoid having bad credit, you can try to do these 3 ways:
1. Avoid bad credit by avoiding loans for consumptive needs
Consumptive behavior is a common cause of bad credit. Productive is when credit is intended to support your work. For example, suppose you run a pastry business and need additional funds because of the large number of orders. New customers pay a 30% down payment, even though you have to pay for raw materials to the vendor. In this situation, you can apply for a bank credit or online loan because of the certainty that you can return the loan and can even generate benefits. Consumptive means when you use credit for fun.
2. Use credit within your ability to pay
Before making credit, pay attention to the credit amount that will be submitted. Never bite more than you can chew. Banks and some online loan companies usually check the status of your credit payments through credit score checking, both ongoing and paid off. If this is the case, chances are you will avoid adding new debt that will be burdensome.
3. Cut unnecessary costs to avoid bad credit
If you already have credit that is still suitable or greater than your ability to pay the installments, what you can do is reduce your expenses. By reducing unnecessary costs from your list of expenses, you can save money so that you can pay credit installments on time without causing bad credit.