Here are some good ways to insure that you never get a bad credit rating.

When you apply for any sort of loan, keep in mind that lending out money is the creditors business. Their way of earning profit is through the interests they accrue from your loans. They may have loan packages that are advantageous to the borrower, but it will be the last thing they show you because they want to make as much money out of you. If you remember this rule and take it to heart, you’re halfway to staying out of bad credit.

Read the fine print. A lot of importance has been placed here but people somehow manage to evade doing this. Read the fine print. Here’s an example. I got life insurance. After five years of paying, I got hospitalized so I needed money for the hospital. The policy I had contained provisions for medical concerns. They called it medical benefits. So I call up the insurance company from my hospital bed and they tell me, “Sir, you could use the policy to pay for hospital bills up to the limit stated in the policy. However, using the medical benefit of the policy will automatically cancel the whole life insurance policy.” If I knew that at the start, I would have kicked them all. Remember it is very important to read the fine print.

When using your credit card or when filing for a loan, make sure that you know exactly how much you have to shell out to repay those loans every time payment becomes due. Make yourself aware of the payment due date. Missing a due date will mean penalties and more interest on your loans.

Learn everything you can about inflation. This does not affect your loan directly, but it adds to your cost of living. When cost of living increases, resources for loan payments become scarce. Don’t take more than you can chew.

Find out about loans that offer overpayments and underpayments. These loans include vacation packages and lump sum payments to the borrowers. There are also other loans available that offer low mortgage monthly installments and low interest rates with insurance policies attached that will pay your mortgage if you are sick, unemployed, in an accident and so on. On the other hand, there are mortgage loans that have high interest rates, high mortgages, and balloon payments attached. When balloon payments are attached to home mortgages it is almost guaranteed in a few years you will be searching for a solution to repair your credit. Beware of balloon payments please. Some home loans offer an acceleration clause that covers you if you miss mortgage payments. The lender will apply the clause by allowing you leniency providing you make payments the following month on time. This type of loan is helpful in preventing foreclosures, repossessions and bad credit ratings.