Nowadays, you can easily check your credit score online. If you are thinking about applying for finance or renting a property, this is something you may have done to ensure everything is in check. When you see a bad score staring back at you, it can be very disheartening and frustrating, especially if you don’t have a clue why you would have such a poor rating. With that in mind, read on to discover the different reasons why you could have a bad credit rating:

  • You have never borrowed money – A lot of people assume that good behavior will equate to a good credit rating. While not borrowing credit is good in theory, as it means you are self-sufficient, it’s not good for your credit rating. Lenders won’t be able to assess whether you are likely to repay them on time, as you won’t have any credit history at all. The best thing to do is get a credit card and make regular payments, so you can show that you are a credible person to lend to. 
Bad Credit Rating
  • You have made numerous applications for loans and credit cards – Have you made a lot of finance applications as of late? This will negatively impact your rating. Keep applications to a minimum, especially over a short period of time. 
  • Closing old credit cards – It is not a good idea to close your oldest credit cards, as this will make your credit history appear a lot shorter than it is. A longer credit history is much better for your rating. 
  • You have missed payments – If you have missed payments for loans and credit cards in the past, this is going to have an extremely detrimental impact on your credit score, especially if this is something you have done consistently. If your credit history is in really bad shape, it is a good idea to get a Sky Blue credit repair review so you can determine where you have gone wrong and what steps you need to take to improve your credit rating
  • Out-of-date personal information – You need to make sure that all of your personal information is up to date, including your name and your current address. Outdated information will have a hugely negative impact because it makes it difficult for lenders to verify that you are who you say you are. 
  • New credit – The number of new accounts you have will impact your credit score. If you have taken out credit from various sources recently, you can expect your score to dip for a while. 
  • The amount of money you owe – There is nothing wrong with regularly borrowing money, in fact, it is encouraged. Nevertheless, if the amount of money you borrow is continually increasing, this isn’t great for your credit rating. If you can lower the amount you owe each and every month, you can expect your score to improve. 
As you can see, there are a number of different reasons why you may have a bad credit rating. If any of the above sounds familiar, make sure you take the necessary steps to boost your score.

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