Obtaining and maintaining a high credit rating
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. They include having a savings account, buying low-priced items on time, being employed and using credit cards.
You can show that you are a good credit risk by developing a record of completing payments on time or by showing a stable income or other sources of money. And once you have a good credit rating, there are steps you can take to ensure that your credit rating remains high.
- If you buy an item on an installment plan and it needs repairs or is stolen, you probably will have to keep making payments. Whatever you do, don't just stop making payments without consulting with the seller or an attorney.
- You have a right to prepay a loan for consumer goods at any time without a penalty.
If you fall behind in your payments, a seller cannot automatically garnish your wages. The seller can only do so by suing you and getting a judgment.
A purchase contract can indicate that, if you default on a loan, you agree to sign over your wages to the seller. However, there are limitations on wage assignment. You can cancel them at any time. They also have a limited term, usually no more than one year.
If you have a poor credit rating, it can be difficult to buy on credit without having cleared up your credit history. Credit reporting agencies often want references on your loans and your employment history for the past five years.
Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.
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If you have questions about the application of the law in a particular case, consult your lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.