Things You Should Know About Your Credit Score

There are quite a few things that you should be aware of about your credit score. Some of them are discussed below.

Couple of myths about credit score

Credit blacklist: All the lenders use a scoring system of their own which is used by them when they look for ideal customer. They’re never published. They also keep varying according to products and lenders. If you get rejected by some lender then it does not mean you have been blacklisted and you may easily get accepted somewhere else.

Credit is given to good borrowers only: Nobody is interested in lending you money without a reason. Of course, lenders and banks are interested in making money from you. They have to ensure that you do not just pay the loan back, but they’ll also make profit from the interest they charge. If you fully repay the balance on the credit card every month then lenders may not be able to make that much money by lending you and you might be rejected even if you’re too good.

Here are a few things which may hinder you from getting credit.

Late payments

Having problems in paying the bills or missing any payments or even getting late in making a repayment are all recorded by credit rating firms. The lenders take a look at it and might think that you’ll be having same problems in future as well.

Financial Judgments

If you’ve been taken to court ever because of your failure to repay debts then it can affect your credit rating and your chances of getting credit can be reduced.

Lots of applications

So many credit applications do not look good. Each time you ask for credit, whether your application gets approved or not, it affects your credit rating. They consider you a risky prospect as you are looking to get more loans. Several applications also indicate that other lenders have turned you down. It may also mean that you are looking to borrow an amount which you may not be able to afford.

Not removing the errors present on the credit report

When you locate some error on the credit report and you delay fixing it then the credit rating you have won’t improve. It will simply impact your credit applications in future as well hindering you to get credit when you need it the most. So, take care of it in time.

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