You may be under the impression that you have a good credit record. After all, you have few outstanding loans and you always pay your bills. But late payments alone can damage your credit standing.
Loan officers study an individual's payment history to determine whether to make loans and what kind of interest rate to set on automobile loans, home mortgages, and personal loans.
You may not be aware you have a credit problem or that your credit rating is low. Check the following list to determine if you have a credit problem. You may have a credit problem if you:
- Worry about how much money you owe
- Miss payments or pay your bills late each month
- Spend more than 20 percent of your paycheck to pay off secured debt
- Pay for groceries with credit instead of cash
- Are refused credit by people or stores
- Make only the minimum payments on your credit cards
- Filed for bankruptcy within the past 10 years
Another indication that you may have credit problems includes nearing the limit on your lines of credit. You also may have a credit problem if you would face immediate financial trouble if you or your spouse lost a job.
(c) 2006. National Endowment for Financial Education. All rights reserved.
