Even with ads and catchy jingles on the radio, few people here in Ohio really think about their credit scores on a regular basis. Then again, if you’ve ever had to file for bankruptcy or are considering it right now, this statement couldn’t be further from the truth. So what do these people know about their credit score that many people don’t and how can readers new to our blog use that information to help themselves down the road?
We wrote on our blog recently about how credit card debt around the country has fallen in recent times. Large amounts of credit card debt, for Ohio residents and others around the U.S., can increase financial headaches and keep credit scores down -- thus making it difficult to qualify for favorable rates on loans or mortgages. This can mean that having lots of debt without ever paying it off can have a very real effect on a person's living situation.
For many people, the economic difficulties of the past few years have been a big wake-up call. When the recent recession was at its bleakest, many people in Ohio and around the country found themselves saddled with onerous credit card debt and a poor credit score.
A bad credit score can affect the ability to open a checking account in Ohio, find an apartment to rent, get a new car and in some cases it can even affect the ability to be seriously considered for a certain job. For those with insurmountable debt, bad credit can be an issue that seems to compound financial problems.
The possible effect of bankruptcy is on the minds of many people in Ohio when they file. This includes how such an action will be seen long term through things like a credit score. Now, many find that they must chance a credit score change because of the amount of unmanageable credit card debts that they have accumulated. Before the recent recession and housing bubble, many banks were encouraging people in Ohio and elsewhere to take money out of their homes through equity loans. When the value went down during the recession, the money was still owed. Some found it hard to make payments and turned to credit cards for help. This may lead to financial stress and a lowering of a credit score.
People in Ohio worry that if they decide to file for a personal bankruptcy that they will have difficulty recovering financially. Just the opposite is true, however, as one recent report notes. In fact, there are steps that people can take as soon as their bankruptcy is finalized that can begin to rebuild a credit score and return to good financial standing.
A recent study at Ohio State says that today's youth are having greater difficulty in paying off credit card debt than previous generations experienced. The study was published in the January edition of Economic Inquiry. Researchers found that younger Americans are amassing higher credit balances than previous generations, and it is taking younger Americans more time to pay off the high debt loads.
In the last post, this blog started a discussion of congressional efforts to modify the credit reporting rules in regard to paid off medical debts.
Many students in Ohio have settled into a dorm room, or apartment near campus. In the past, students were often inundated with offers from credit card companies, providing access to plastic. However, tighter consumer protection rules have generally reduced the overall presence of credit card offers that students can receive while on campus.
Recently, the Columbus Dispatch reported its findings in a lengthy investigation into the difficulties consumers can experience from errors that may be contained in their credit reports. Ohio residents who are contemplating bankruptcy may think about what effect a bankruptcy may have on a credit score, although most financially distressed consumers may already be experiencing credit score issues.