A bad credit score can come from unforeseeable circumstances, like a medical emergency or car trouble, but typically, those who are in a great amount of debt and have received a bad credit score as a result have poor financial habits and live outside of their means.
Having cash on hand for big purchases is an old world habit that is rarely practiced today, as many feel it is their right to have the best and most lavish material possessions. While there is nothing wrong with a big house and a nice car, buying things that are outside of your price range is going to always lead to financial trouble.
The vast majority of people that want a home or a car will not save up the money to buy these things, but would rather take a loan that will cost more over time, with interest factored in. Oddly enough, a home loan payment and a car payment usually don’t turn a good credit score bad, as these bills are usually paid first.
Constantly buying unnecessary items on credit causes debt to pile up and, again when interest is factored in, you are going to find yourself behind an almost insurmountable mountain of debt.
By using the simple practices of budgeting, saving, and even sacrificing you can get out of debt and stay out of debt all while raising your credit score. If you use credit to buy non-necessities you are in the position to improve your credit history. However, before you buy something that isn’t vital, like food, water or shelter, you need to make a monthly or weekly budget and save up the money before making the purchase.
You can make the purchase on credit, having the money on hand, and then when your credit card bill comes, pay off the charge with the money that was saved. Simple practices like this will go a long way helping you not only stay out of debt, but it can improve your bad credit score over time.