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In the modern world that we are living in, credit is largely unavoidable. From home loans to credit cards, to cell phone contracts, we all have some sort of credit. What we need to remember is that credit is not a crime – but problems start when the credit is not well managed.

The Difference between Good Credit and Bad Credit

Good credit is basically credit that you can afford to repay and is used to buy things that you need. A simple example is using credit to buy a car. Most people across all income brackets buy vehicles using credit. The main reason for this is because the majority of people cannot afford to pay hundreds of thousands in cash for their vehicle purchases. The same applies with purchasing a house, hence people get Home Loans and Bonds. These will remain listed as good credit if you can afford to pay the monthly instalments and keep to the repayment schedule.

Bad credit is credit that you cannot afford, and that is mostly used for things you don’t need, such as living a lavish lifestyle and funding it with credit or taking up new credit that you can’t afford to repay.

Benefits of Having Good Credit.

Good credit always helps when you have an emergency to attend to and do not have cash.  It also helps with creating a positive credit rating that will give you a good position for when you want to apply for a car, home or business loan, or something as small as a new cell phone contract.

As much as we were taught not to buy goods on credit but rather save for what we want, not having a credit history can jeopardise your chances of purchasing your dream home or a car because there will be nothing to show that you are responsible borrower who can manage balances and payments. We highly advise consumers to at least have one well managed active account to maintain a healthy credit record.


What to do when Good Credit becomes Bad Credit?

Life is not always completely figured out; your circumstances may change leading to you not being able to manage your credit effectively.  Pioneer Debt Solutions can negotiate with your creditors for your instalments and interest rate to be decreased allowing you to pay off your credits in an affordable manner and assuring that you are protected from legal actions that might be taken against you.

Get in touch with the professional team at Pioneer Debt Solutions to start discussing solutions for your credit situation today!

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