Consequences of Neglecting Short Term Finance
Consequences of Neglecting Short Term Finance
As long as there is a need for money, there will be a need for short term funding. Running out of funding is no joke, as this could cause serious consequences for your credit record. Without a clean credit record, you will find that you may have troubles trying to obtain any form of credit. This worsens depending on how many defaults you have, and the seriousness of your defaults. All in all, do not neglect the need for short term finance.
Reason why people neglect short term finance
Most people can make the correct decisions, especially if they use their critical thinking skills to look at it logically. The main reasons that cause people to decide against short term finance are trivial excuses such as, short term funding being bothersome or short term finance will cause a loss in interest and fees anyway. However, if you take a step back and look at the big picture, you will realize how many things actually depend on your credit record, and whether or not it is worth it having short term finance save your credit record.
Short term finance does not come without sacrifices. There is interest involved, making more losses the more you drag it out, and there is a fee charged for their service no matter how short the loan term stays for. You need to decide if this is worth paying for to save your credit record. A person's financial history is listed on their credit record. It is used to determine financial trust of an individual when it comes to loans or any other method of obtaining a form of credit. While there are solutions for those who made mistakes with bad credit, those generally cost far more than what you would have paid for a loan earlier on.
Using short term finance early on
They say prevention is better than cure, and this couldn't be more true for short term finance. Credit records cannot be fixed up in a fast amount of time, so when people realize how precious their credit record is, it would already be too late to fix it. This could easily lock someone on a one way path to bankruptcy, which come with very heavy consequences, and lasting up to around 10 years. By using short term funding to take care of bills or unexpected expenses, you are able to easily overcome small problems, preventing the need for defaults and damage to your credit record.
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