It is an extremely common concern of those looking to borrow money that their credit score may prevent them from doing so. The current economic climate does not help. Banks have seemingly become more reluctant to lend money, though other lenders are less so. Unfortunately, if you’ve got anything less than a spotless credit rating, it can be very difficult to find funding. So what factors come in to play to cause a less than perfect credit score? Moolr took a look at things that damage your credit score.
Over a third of your credit score is based on your payment history, so timeous repayments are rather important. Most of us have payments to make every month. Some people like to pay their bills off as soon as they arrive but others leave it a while and pay them off when possible. It is vital that you do not miss payments though, should you wish to maintain a good credit score.
It may be that you haven’t got the funds or that you’ve simply forgotten to pay the bill, but missing payments can be catastrophic for your credit score, so avoid it at all costs.
Every time that you apply for a loan or credit the credit report will list it. If you have multiple applications rejected, this could go against you. Every rejected application is essentially a black mark against your name. This is because it paints a picture of desperation for prospective lenders.
Thus, don’t just keep applying for more loans with the hopes that you’ll get lucky eventually. Stop applying before you cause more damage to your credit score. Wait a while before applying again. In the meantime, try and ascertain why lenders rejected you in the first place.
Take the time to build up a positive credit rating, thought there are also lenders that will offer loans despite a bad credit rating.
It seems a ridiculous notion, but often having no credit history, and having never had to borrow is worse than having a history of borrowing! When looking to to lend you money, lenders look for evidence that you are able to repay money fully and on time. Because you’ve never borrowed any money, there’s no evidence of you being able to repay it. Thus, those without a credit history can really struggle to secure a loan or mortgage. Try taking out a credit card or a phone contract to build up your credit rating. But remember, always pay off your bills as soon as possible and in full.
If you’ve applied for a loan or mortgage and found that it’s been unexpectedly rejected then there may be a mistake on your credit report. While they’re fairly rare, it’s always worth checking that there are no mistakes and that all information is provided in full and accurately.
A mistake on your report could damage your rating significantly. Thus, it’s important that you remedy any mistakes quickly. It’s usually possible to view your credit report so take a look at yours and make sure everything’s in order.