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Controlling Your Credit and Credit Rating

The advantages to buying on credit are:

  • It is convenient;
  • Usually 30 days free credit have been offered on credit card transactions;
  • Needs can be satisfied immediately;
  • Can take advantage of a special bargain or sale when cash is not available;
  • Making monthly payments may lead to an habitual monthly set-aside;
  • Using credit can be a hedge against inflation as prices rise;
  • A good credit rating makes it easier to get credit in emergencies;
  • Finance payments may be withheld until defective or broken goods are repaired or replaced in some cases.

The disadvantages are:

  • It encourages impulse spending;
  • Comparison shopping is discouraged if not all stores accept the credit card;
  • Money tied up in installment payments is not available for future needs.
  • Credit costs increase the cost of the goods purchases;
  • If payments are not met, the item may be repossessed and money already paid is lost;
  • A poor credit rating makes it harder to get credit;
  • A consumer may agree to something he/she does not want because the contract is not understood;
  • Credit buyers tend to buy higher priced merchandise because they are given a longer period of time to repay the debt;
  • Some credit buyers unknowingly pay more for goods than cash buyers who shop around for a “cash discount”;
  • Credit buyers are more easily defrauded.

One of the major causes of financial difficulties is lack of control over credit purchasing.  Credit creates the illusion that the buyer has money and often the purchase is put out of mind long before the bill is paid.



  • Using credit to create income.
  •  Stalling one creditor to pay another.
  • No savings.
  • Several NSFcharges.
  • Charging more per month than paying on an account.
  • No money before payday.
  • Consolidating loans.
  • Requesting credit limit increases.
  • Unplanned major purchases.
  • Don’t know real monthly expenses.
  • Using a credit card as a source of financing rather than a convenience.

When can I start rebuilding my credit rating?

Immediately after filing, anyone can apply for credit during your bankruptcy; however, you must disclose your bankruptcy to the creditor. For further information on this matter consult the Credit rating and re-establishment of credit section.