We don’t know what the New Year might have in stall for us, but knowledge is power and being prepared is better than being caught unawares… Understanding what a credit score is and why it is necessary to have a good one, should be helpful in 2022.
The parameters used to generate a credit score are mostly the following:
- How much credit you have used (Credit history)
- Your payment history (whether you have paid your installments on time & regularly)
- Recent credit applications.
- Any defaults and court orders against your name.
- Details of your accounts – eg. insurance, cellphone accounts, retail accounts etc.
The following will have a negative impact on your credit score:
- Late/missed payments
- Defaults on debt
- Court Judgments
If you have fallen into a bad debt pattern already, there are some things to remember so that you don’t totally annihilate your credit score:
- A late payment is better than not paying at all.
- Be proactive: get in touch with your creditors and make arrangements before it is too late and you get handed over for bad debt.
- Get professional help if you need to.
Red Dot Now provides accounting, payroll and tax compliance services using the best of breed online technology.
Should you want to discuss this or any of our services further, contact Ryan Coates on e-mail at firstname.lastname@example.org