The way that the American credit system is structured works to help banks get rich and consumers stay poor. If you are unable to make payments on time, getting back on track can be extremely difficult. credit card default consequences can be especially troubling, because once you fall behind your creditor will most likely raise your interest rate to 30%. Additionally, you will be charged both late fees and over limit fees. Over the limit fees will be assessed even if it was fees and not your spending that took you over your limit. Your late payments will be reported to the three major credit bureaus.
Once late payments are reporting to your credit bureaus, chances are your other creditors will chime in and increase your interest rates. Believe it or not, they may do this even though you may have never made a late payment on their account. It is easy to see why bad credit can seriously hurt your ability to build wealth. For most people, a low credit score will mean that you will be paying at least 40% more on your monthly as compared to what your costs would be if your credit was perfect.
When you are dealing with bad credit, the most important step to take is to start credit restoration right away. While you may not want to deal with the situation, it is extremely important that you address it immediately. You will want to start the process by getting copies of your credit bureaus so that you can understand exactly what you are dealing with.
Once you have a clear understanding of your situation, you need to develop a credit repair plan. If you are short on time, you may want to hire a credit repair company. However, there is absolutely no reason why you cannot repair your own credit.