How Good People Get Bad Credit

Bad credit doesn’t discriminate. Whether you’re a recent graduate or a senior citizen, you can experience bad credit. In most cases it’s not because of criminal activity or willful disregard. In a vast number of situations, it’s simply a mistake or a change in life that sets that ball in motion. And once it starts rolling, it tends to find its way to the bottom of the hill.

How Good People Get Bad Credit

These are just a handful of ways that good people, the ones you least expect, might find themselves in credit trouble.

A Messy Divorce

With half of all marriages in North America ending in divorce, it’s a common cause for bad credit. During the proceedings, there are miscommunications and hurt feelings, and understandably.
  • One partner thinks the other is making the payments and vice versa, so no one does.
  • One spouse isn’t satisfied with a judgment or arrangement and decides to get back at the other by not paying the bills.
  • The person who gets the car or the house (or both!) discovers their income can’t support the payments and defaults.
  • And so on…
At the end of the day, both people are on their own and could find themselves with bad credit.

Critical Illness

One in three people experiences a critical illness in their lifetime: cancer, stroke, or heart attack to name a few. Very few people have coverage in place to cover their financial obligations during that time, leaving bills unpaid. Once they’ve recovered, they head home to ‘past due’ and ‘final notice’ mail and creditor calls. Their credit rating has taken a serious hit, without any real fault of their own.

Job Loss

There are headlines every day about factories closing down and technology taking the place of people. Layoffs and restructuring lands thousands of people in bad credit situations with no income to support themselves or their families. They simply can’t make their car or mortgage payments and get a black mark on their credit score.

Failed Businesses

An entrepreneur strikes out on their own with a business venture, only to discover it’s unviable in the long run. Money runs out and the business fails or claims bankruptcy. That bankruptcy can carry over to their personal credit score in some cases, even though they haven’t failed on their personal credit at all.

Family Changes

A young couple may have their finances all worked out. Then they get the news that a little one is on the way. Everyone knows the financial toll a child comes with, and that’s without considering an education fund. Providing for the family comes first, and bills may be left unpaid or paid late.   In all of these cases, the people involved aren’t bad people. Good people get bad credit because they simply have encountered a change in life that found them over their heads. At CarUp KC, we’ll help you discover how your car loan fits into your current situation and help you plan for the things you hadn’t considered.

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