What Causes Bad Credit?

Poor Credit Doesn't Happen Overnight

Your credit score is calculated through a number of different factors.

Over time, your score will become higher or lower depending on how

well you are able to address the following criteria:

– Credit Utilization

– Payment History

– Types of Credit

– Credit Inquiries

– Delinquencies, Collections, and Bankruptcy

The following slides will provide information on what can lower your credit score, and how you can start rebuilding.

Missing a PaymentEven if you can only pay the minimum, it's extremely important to make

regular payments every month.

One missed payment of just 30 days can affect your credit score.

It takes 7 years for a missed payment to be removed from your credit

report.

Allowing an Account to Go to Collections

If you stop making payments altogether, your

account might go into collections.

Eventually, the debt could get assigned or

sold to a debt collection agency.

A delinquent account will be on your credit

report for 7 years as well.

Keeping a High BalanceCredit utilization is an incredibly important factor in determining your

credit score.

If you have high balances on all of your cards, creditors will question

your ability to pay back your debt.

High credit utilization is anything over 30% of your total credit.

Applying for Several Lines of Credit in a Short Period of Time

This is a red flag for creditors.

It could be a sign that you have unsteady finances and are looking for a

quick solution.

Applying for more credit just to improve your credit utilization might not

be the best idea.

How Can You Amend Poor Credit Mistakes

• Request your Credit Report. Make sure

there aren't any errors.

• Create a budget.

• Sign up for automatic bill pay.

• Apply for second chance credit cards to

rebuild credit.

• Work with debt collectors to settle any

open delinquent accounts.

Learn how to make sound personal

finance decisions with OneUnited Bank

877-663-8648100 Franklin Street. Boston, MA 02110