A credit rating is supposed to measure your ability to repay a debt. There are a number of ways to develop a good credit rating including:
- Having a savings account
- Buying low-priced items on time
- Being employed
- Using credit cards
You can show that you are a good credit risk by developing a record of making payments on time or by showing a stable income or other sources of money. When considering your credit rating, these are some good things to know:
- Keep making payments. Whatever you do, don't just stop making payments without consulting with the seller or an attorney even if the product breaks or is stolen.
- Prepay a loan for consumer goods at any time without a penalty.
- If a buyer falls behind on payments, a seller cannot automatically garnish your wages. The seller can only do so by suing and getting a judgment.
- A purchase contract can indicate that if a loan is defaulted, wages must be turned over to the seller. However, there are limitations on wage assignment. They can be cancelled at any time. They also have a limited term, usually no more than one year.
- If your credit rating is poor, it can be difficult to buy on credit without having cleared up the credit history. Credit reporting agencies often report on loans and employment history for the past five years.
Note: This information was prepared as a public service by the Illinois State Bar Association. Every effort has been made to provide accurate information at the time of publication. For the most current information, please consult your lawyer. If you need a lawyer and do not have one, visit our lawyer referral page.
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