You may be wondering how someone could allow their credit to get so out of hand or allow their credit scores to drop below 500. After 20 years of helping people restore their credit and learning the habits of consumers, I’ve determined the leading causes of bad credit and it’s not what you may expect…
Sure, not paying your bills on time is what causes bad credit, but what causes people to not pay their bills on time?
You might be surprised to hear that financial issues aren’t always the culprit.
It goes deeper than that…
I have found that most people with serious credit issues suffer from dissociation.
It’s not that they just “don’t pay their bills”, the real issue is they don’t pay attention.
Dissociation is a mental process involving a disconnection between thoughts, memory, identity or surroundings. Clients that I’ve encountered with this type of dissociation really struggle with time management and communication. They often miss appointments, don’t follow up on important tasks, or don’t respond in a timely manner to emails and texts. Many times, they procrastinate or avoid serious financial situations altogether, resulting in significant damage to their credit and substantially lower scores. This type of behavior results in even greater financial hardship and deeper dissociation.
So, what’s the root cause of this behavior and how can we change it and become accountable? I believe common causes can be traced back to parenting/education or not having financial role models. Fiscal responsibility is taught at home. As we age, we typically adopt the same financial behavior as our parents. If parents struggle financially, that means there’s a good chance their children will too. On the flip side, children born into wealth often do not learn good financial values and get themselves into financial trouble because they have never had to learn to budget.
Another cause of dissociation is stress used as a defense mechanism to avoid or escape overwhelming feelings. We all use the excuse – “I’ve been so busy…” That’s a sign of dissociation. No one is “too busy” to be accountable, especially when it comes to one’s finances. Americans have been programmed to believe that nothing is more important than work. The reality is, we all need a work/life balance to be truly successful, especially when it comes to financial success.
Nothing is more important than your credit, says the credit guy! Of course, I’m going to tell you that, but I have the facts to back up that statement. Your credit determines how much money you’re spending and how much money you actually save every month. The lower your credit scores, the more you pay for bills, interest payments, insurance premiums, and security deposits. A lower credit score also limits your options to access money, assistance, loans, and can even affect your employment directly impacting how much money you make! This is why your credit is your #1 Financial Asset.
Let’s go back…
The cure can be simple. Time management and communication are effective tools to overcome dissociation. Take the time and focus on your finances, then hold yourself accountable with your money and financial decisions. Set reminders or alarms on your phone for bills and important tasks. Take 15 minutes a day to answer emails, clean out your inbox, and unsubscribe to all emails that are not productive. Always respond to text messages ASAP and respect then lines of communication you have with others.
If you have bad credit, you may suffer from dissociation. Take an aggressive approach and schedule a FREE REPORT REVIEW TODAY. Know and understand what’s on your credit report, what’s affecting your credit scores and what options you have in order to improve your credit and raise your credit scores into the 700’s. If that means you have to take a half day off work, DO IT! Nothing is more important than having good credit.
The final step is to take action…
Stop procrastinating or making excuses! Doing the same thing and expecting things to change is the definition of insanity. You’re not too busy to take 30 minutes to an hour and handle your business. Hold yourself accountable and take action with the FREE Credit Counseling we provide and make an informed decision to improve your credit situation. Challenge yourself to be better and avoid the dissociation that currently controls your life.
If you or anyone you know is struggling with credit or debt issues please contact EditMyCredit for FREE Credit/Debt Counseling at 469-609-8068.
