Can people have good and bad credit at the same time? What does it take to have a good credit status? And how does one stay away from bad credit? These are the questions that bog many people’s minds.

Let’s discuss each of them so you are clarified on this important part of our financial lives. Credit, as we all know, is what many of us avail of when we take out loans and own credit cards. It’s a form of debt that when not repaid on time will continue to accumulate.

Every time people avail of credit, this gets recorded by rating agencies. Depending on how you repay them can affect the status of your credit record. So in other words, your repayment history is also known by these agencies.

Yes, people can have both good and bad credit at the same time. Good credit can be achieved if you are prompt in repaying your monthly dues and you are able to pay off your balance.

A person, however, earns a bad credit rating if he or she misses on monthly payments for different types of loans and credit card bills or defaults on them. Bankruptcies and court decisions can also signify bad credit behavior.

You have to know that defaults often result in not being able to settle your dues after 60 days. This record stays for five years and could then mean difficulty in applying for a new loan or credit card as most lenders and companies get access to these records. But this can be a case-to-case basis as there are credit companies that may approve applicants with bad credit record.

Now to answer the question “How does one stay away from bad credit?,” there are many ways to do this if you only commit to it and be consistent. The first thing you can do is to be prompt in paying your monthly dues. You have to be responsible for your finances because it will still be you who will suffer the consequences in the end if you take this for granted. You have a choice between paying before the due date and paying exactly on the due date. Sometimes, people have the habit of paying only at the last minute. Even though money is already available, they will still wait for the due date. This behavior needs to be changed if possible because paying before the due date is a better option.

Did you know that paying your credit card bill even a few days late can already affect your credit record? Other than that, you incur additional charges which could mean a higher balance to pay. When this happens, you may even be refused a mortgage loan later on.

For loans including the short term payday and cash loans, it is also important that they be paid on time. They may be considered an affordable option but the responsibility still lies with you to repay them on time. If you are able to do this, you have a chance to easily avail of another loan later on without much difficulty.