A very close friend of mine started with a good credit score, just like everyone else. She took out some credit cards, and used them to purchase a lot of things. She was able to pay her bills at first but eventually went into debt. For about 5 years, she had over a thousand dollars in credit card debt. Not only that, for she also took out loans on cars as well.

Afterwards, she realized that it was too much to deal with so she declared bankruptcy. With this, she stopped paying her credit cards dues because if she would not, the credit card companies would not be convinced that she was financially unstable. After giving a letter explaining everything about the problem she was in, most companies gave her a cut of at least 30%. However, she still has to pay the remaining balances as soon as possible.

In the end, her bad rating is not as bad as you might think. She did rebuild her credit cards for bad credits and credit balances into a credit score.

I also know someone who did not pay her phone bill on time and accumulated a very bad credit score because the service was disconnected. Just like her other credit infractions, this affected her credit scores.

She now has to purchase things through cash. She can no longer borrow money and has to save for her purchases. However, the bright side to having bad credit is that she no longer has to worry about paying all those dues on time.

Indeed, credit cards for people with bad credit are not bad at all. But then, I am not saying you should go ahead and plan to get bad credit ratings. If you make it a habit, this would only lead to bigger problems for you. Take my friends?experiences as a lesson and do not go into that much debt.

With our economic crisis today, I would most likely recommend to save money and pay everything with cash. If you already have credit card and loan balances, pay off the ones with higher interest rates first before anything else. As soon as all these are paid off, then it is time for you to save money and start your own business.

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