The Dangers of Bad Credit and How to Avoid It

January 30, 2019

This article is here to help you avoid a bad credit score in a fun and intuitive way. So, sit back and enjoy as we take you on a journey through the dangers of bad credit and getting you to the best score you can have!

Resist the Temptation

Most people start with good credit scores, but over time, and with poor financial decisions, they go to the wrong side, so to say. In many cases, you barely even realize it until it’s too late – when you’ve lost hundreds of points on your score, and it’s as if you have no rating at all.

People get to such a point by not being careful with their lenders.

Many try to trick you by offering you easy loans and making bold promises. What you need to do is resist the temptation of believing their seemingly plausible and charming stories.

Always have the same thing in mind – if it sounds too good to be true, beware.

Carefully Consider All Options

If you’re going to accept an offer from a lender, it needs to be the one of your choosing, not one that offers you vast riches.

Search for one carefully, take your time, don’t rush into things because your score will plummet if you’re not careful.

What you need to do is carefully look through the options you have and look for favorable conditions. Don’t allow any tricksters to lead you into temptation.

Go Low, Not High

The best thing that you can do is find low annual percentage rates, or better said, a low APR in your loan. You’ll know that the best lender is the one with the lowest APR as this percentage will result in the smallest cost you will pay.

The ones with high APRs seem great in the beginning, they offer the best of things like the tricksters we already avoided, but they represent one of the worst dangers for your score.

Make Hard Choices

Another danger comes with the choice of paying your debt:

  • in small installments over long periods with high interest rates
  • paying in larger installments with lower rates and paying off the debt in a shorter period

Which do you think is better?

If you chose the second option, then you were right, because that way you’ll pay less overall and you’ll be able to pay off your debt much faster. It will be hard, but it will be better and safer in the long run.

Secured Loans?

At some point during this journey, you’ll get a choice to use a title loan or another secured loan that always includes collateral.

They also always look good because of their excellent terms and low interest rates. But if you, once again, think things carefully, you’ll find that offering your precious items as collateral to lenders is a choice you needn’t make because there’s no need to risk your valuable possessions for a loan.

These loans seem great, but as is always the case, the devil is in the details. What you need to do here and with any credit, is read the terms carefully before you sign off on it.If you manage to follow these tips and get the right loans, your credit score will always have a bright future ahead of it and so will you!

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