Introduction
Cash is a thing of the past, today everything is plastic. Plastic money is the term given to the use of credit/debit cards which have become a popular substitute to carrying wads of cash around. This is safer as well as less risky because someone who steals your credit/debit card will need to imitate your signature exactly to pull it off and you can get your card cancelled as soon as you realize it has been stolen. The use of plastic money has given a huge boost to the banking industry and in almost every western economy banks are as essential a good as clothing because they tend to make your life easier. But the constant use of credit has its downside. Bad loans credit and financial history are all inter related. In such credit based economies, having a good credit history is essential.
History
Your credit history is basically a record of your financial dealings, on record in the past which include how many loans you took, oh what amount and how much of them you have paid back. The better your financial history is the better chance you have at getting a good loan from the bank. A good loan is defined as one with a comparatively low interest rate as this makes it easier to pay back. Bad loans credit is hard to achieve as you already have a loan which is difficult to pay (high interest rate) and on top of it you need more credit, to anyone that would seem like a hard bargain as you will surely not be able to pay the loan back, including the previous one. But smart and ruthless bankers take full advantage of high risk clients with significant collateral so if you have something worthy to offer to exchange for your loan, bad loans credit is surely not the way to go.
Features
Loans can be beneficial to the person taking them out provided one of two things. Either he has the ability to pay the loan back or he is a smart businessman who has a long run plan to eventually clear himself of the debt. On a corporate level, some kind of debt is always good for a company as it shows the amount of trust people put on it. But for an individual, bad loans credit goes a long way with you as mentioned earlier, every financial transaction that occurs through a bank is monitored and a record is kept of it so defaulters are highlighted wherever they go.
Tips and comments
Everything done in this modern era is usually through computers and thus digital and digital paths leave a trail. Thus bad loans credit will haunt you, no matter how hard you try to avoid it. It is best to come clean and only spend as much as you can afford. This is one of the major criticisms of the credit system that it is accused of giving people money which they don’t earn thus cannot pay back. Debt piles on them and they cannot borrow more because of the bad image and they end having to surrender whatever they own.
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