Though you probably don’t give your credit score much thought, when it’s time to apply for a loan, it’s one of the most significant numbers around. If you’ve recently been refused a loan, a poor credit score may be the root of the problem. To help you boost your rating and get the cash you need, check out the top five factors that could be giving you bad credit.
1. You’ve never used credit
If you’ve never had a credit card, taken out a loan or got into any debt, you might think your credit score would be perfect. However, in most cases, this doesn’t hold true. Lenders want to see you’ve had some sort or credit history; otherwise, they won’t be able to assess whether or not you’ll repay the cash.
2. You repay your loans too quickly
Likewise, if you always make credit card and loan repayments on time and never miss a scheduled payment, you’d be forgiven for believing banks would be lining up to lend you money. The credit rating system however is designed to assure lenders they will make a profit from your loan. This means they want to see a few missed payments and loan extensions in your credit history.
3. Multiple loan applications
In general, the loan industry is anti-shopping around. If you apply for too many loans or credit cards in a short space of time, lenders may become suspicious, and your credit rating will be affected. If your first application is rejected, don’t get into a ‘rejection spiral’ by sending applications left, right and centre. Instead, try to get to the solution of your poor credit score or contact a short term loan provider.
4. Application inconsistencies
Discrepancies on your loan applications will often raise red flags with credit rating agencies. Try not to change the information you supply with your credit applications, especially important things like your address, full name and loan history.
5. Severe financial problems
If you’ve had serious financial difficulty in the past, there’s a good chance your credit score will still be suffering today. Bankruptcy, long-term debt and bills that have gone unpaid can all lead to poor credit ratings, especially if you haven’t had a significant boost in income in the meantime.
If you’re recently refused credit, a payday loan could be the solution. Easy to apply for, these flexible loans can be in your account in hours, and payday lenders often require less paperwork and fewer background checks than banks and other loan providers.
To find out more, or to apply for a loan of your own, take a look around our site today.