Damaging your credit rating is far easier to do than it is to repair and recover from a poor rating. Your credit rating can be affected by several factors some of which might not even be your fault such as theft of your wallet or identity theft, identity theft is on the increase as many have found and have also found that even despite their rating being poor through no fault of their own, it can take months if not years to re-establish a credit rating.
Your credit rating can be compared to taking a test, before the lender will give you a loan, credit card, mortgage or any other form of credit you have to pass this test. This is to ensure that you will be able to pay back the loan and thus reduces the risk that the lender is taking on you, the higher your rating is then the less risk you will be seen as and as such are more likely to get approved for a loan. If your credit score is low then your chances of getting approved will be very slim if any.
While identity theft and crime are two of the reasons why your credit rating goes down there are also many other reasons. Factors that can affect your credit rating for the bad include such as making late payments on your bills or missing payment altogether, applying for and taking out more than 80% of the total amount of credit that is available to you and requesting too many lines of credit.
If you want to keep your credit rating on a good level then it is essential that you always ensure that you pay your bills on time, don’t use more than 25% of the credit that is available to you and make sure that you remain in steady employment.
Repairing a bad credit score is hard and does take time and patience but it can be done. To begin with you should request a copy of your credit score and check it for any errors or glitches that shouldn’t be there to start with, mistakes have been known to happen and these are the easiest to correct and improve your score. Never take out credit or request it unless you absolutely need to, for example don’t ask for a store card just to get the discount as this is still regarded as a form of credit. Make sure that you use your credit card less and if possible ensure that you pay off the outstanding every month on the card, always try to keep the balance on your credit cards less than 25% of that which is available to you. Perhaps the most important thing to remember is to avoid declaring bankruptcy although this might seem to be the best solution in the short term it is the worst thing you can do to affect your credit rating. When taking out any form of credit it is essential that you understand the consequences of credit and if not then seek the advice of a financial advisor before making a huge mistake.
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Damaging your credit rating is far easier to do than it is to repair and recover from a poor rating. Your credit rating can be affected by several factors some of which might not even be your fault such as theft of your wallet or identity theft, identity theft is on the increase as many have found and have also found that even despite their rating being poor through no fault of their own, it can take months if not years to re-establish a credit rating.
