What Gives You Bad Credit? Let’s Check It Out!
Your credit score is one of the most crucial factors that decide your financial life. Banks check your past credit history to decide whether to give you a loan or not. Car insurance agencies consider your credit score when determining your insurance rate. While due to all these reasons, it is very important to consider those things that help in building a worthy credit score. There’re many reasons that resulting bad credit score and here’s some:-
1) Paying Late
Forty percent of your credit score is affecting due to payment history. Being late payment of your credit card outstanding bills will hurt your credit score. Please, pay your credit card bill on time to avoid bad credit score rating.
2) Defaulting on a loan
Loan defaulting is also a reason for an adverse credit score. Default status shows that you’re not able to fulfill the loan contract terms or incapable to repay the loan amount.
3) Having your home Foreclosed
Getting late payment on your mortgage payments will lead your lender to foreclose your home. The late payment will hurt your credit score and make it hard to apply for a future mortgage loan.
4) High credit card balances
The second most important thing that hurt your credit score is level of debts, measured by credit utilization. Having high credit card balance increase your credit utilization and lower your credit score.
5) Applying for many credit cards and loans
Making too many loan applications or credit card requests within a short frame of time will cause your credit score drop. Keep your application limited.
How to improve your credit score?
If your credit score is little down, don’t be panic! There are some few simple things that help in boosting credit score.
- The recommended way to improve your credit score is to make all your payments on time without any delay.
- Keep down your debts by paying them on time.
- Try to keep your credit balances below 50% of your available credit.
- Avoid applying for credit card unless you really need it.
- There are some lenders like us that provide bad credit loans. Go for it and get cash.