Credit Rating And Your Obligation

The best way to establish a good credit rating is to promptly meet your financial obligations and commitments.

Always determine that you can meet the credit commitments before considering taking on any debt – It does not hurt to check your credit report and check score as well for better financing rates on major purchases. Then, comply with your agreement. Otherwise you should not sign such an agreement. Never sign a credit contract and later decide you cannot afford it.

A note or contract for payment on time may be transferred by the seller another finance company or party, whether specifically mentioned or not, and then, you are obligated to that agency for payments specified in your contract. There is a difference between your contract with a contractor or other seller and your financial obligation to a bank or finance company regarding the same transaction. Failure of the contractor or seller to fulfill his obligation to you does not release you from your obligation to the bank or finance company. (The only exception would be in a case when the finance company had been directly involved in and responsible for the original transaction, or where special statute provides that a finance company takes a consumer contract subject to defenses of the consumer against the original contractor.)

Similarly, for fulfillment of a guarantee or warranty, you must look to the manufacturer, or seller, or contractor or whoever gives it, not to the bank or finance agency. Your responsibility for payment to it continues.

Failure to make payments or failure otherwise to meet the terms of your contract or agreement makes you liable to lawful collection procedures. The law provides effective methods to enforce credit contracts. Accordingly, one whose record is bad, may expect close follow-up in the event of delinquency. Those who loan money or finance consumer contracts depend upon prompt payments to operate successfully.

If you make a valid contract for credit and then fail or refuse to go through with it, it is for the creditor to decide whether to release you fom the debt, or attempt to enforce the contract or collect damages. many people are facing this when settling the large credit card balances. Whether or not a deposit is refunded is dependent on the policy or willingness of the creditor. The reason for a deposit or down payment is to validate a contract and as assurance that you really mean to go through with it. You may feel justified in refusing to go through with a contract, but if you do so without adequate legal cause, or without agreement by the other party, you are liable.

In any transaction, as in home repairs and remodeling, where a completion certificate is required, do not sign such certificate unless, in fact, the work is completed and up to the agreed upon standards. Do not sign for any other reason.

Do not sign as a co-signer (this includes your kids and family members) in any transaction, nor buy in your name for somebody else not eligible for credit, unless you are ready, willing, and able to assume the obligation of the contract. A friendly gesture in signing as a co-maker or co-signer may become a serious obligation if the principal maker or signer becomes disabled or dies, loses his job or moves away, or for other reasons, is unable to pay.